"What is it like when you are a Joseph Stilwell wannabe?
Kevin Padrick at Obsidian Finance hitched a ride with Joseph Stilwell and his group of proxy prize fighters lat in 2000 against a small, unsuspecting, bank in Baker, OR. Oregon Trail Financial Corp, known commercially as Pioneer Bank, was blindsided by Joseph Stilwell. Stilwell blew in and stated that “management was not maximizing shareholder value and proposed that Oregon Trail voluntarily place its nominees on the board of directors”. One of those nominees would be Kevin Padrick. Kevin Padrick seems to sneak himself in places where he sees DOLLAR SIGNS like the very cash rich Summit 1031 bankruptcy – $13.6 Million in cash, $10 Million Bond, $3 Million in E&O, approx $11.8 Million in real property and business assets. See all the DOLLAR SIGNS. It is my opinion Kevin Padrick start drooling when he sees he can get his hands on other people’s money. Anyway….
Oregon Trail rejected the proposal and the fight was on. And did it ever get nasty!! Stilwell announced its intention to solicit proxies to elect an alternate nominee. They needed someone from Oregon (residency requirements for all board members). All he needed was the shareholder list but Oregon Trail said “NO WAY!” Stilwell sued and convinced the court to make Oregon Trail turn its shareholder listing over plus pay for $10,000 of Stilwell’s legal expenses. What the heck? Is this a case of Pit Bull Magic?
The Stilwell group also filed lawsuits against two of the Oregon Trail directors – Chuck Rouse and Ed Elms. The charges: ONE was charged with violating the Oregon Trail’s residency requirements which the OTHER was charged with perjury based on his testimony in the first lawsuit. BOTH CASES WERE DISMISSED pretrial but legal defense of the directors cost the bank $200K. But never say die, Stilwell filed an appeal on one suit and re-filed the other suit in state court. Elms and Rouse sued back. Both sides requested injunctive relief from the courts.
US Magistrate Judge John Jelderks denied both requests. However, he stated that Oregon Trail would probably succeed on its claim at trial (violation of the anit-fraud proxy regulation). He also said that there was a strong possibility that the allegations against Rouse and Elms were not well founded. And finally, that there was a strong probability that Oregon Trail could show Stilwell’s conduct was part of a calculated attack upon the integrity of the incumbent directors and management. Whew…sounds like dirty pool, but that doesn’t stop a guy like Stilwell or his study – Kevin Padrick.
Stilwell used proxies to force the election of Kevin Padrick to the Oregon Trail board. This seems to be Kevin Padrick’s style – Go around and force whatever you want on unsuspecting victims. Why did Kevin Padrick play along with this attack on Oregon Trail? Stilwell gave Padrick 20,000 shares of stock options for his willingness to run for a seat on the board. Ahhh – there had to be DOLLAR SIGNS somewhere.
Per the La Grande Observer, Padrick said he intended to ask probing questions during board meetings, but said he wasn’t elected to the board to shake things up. Seems to me the words coming out of Padrick’s mouth never match his actions. Wonder what he told the Summit 1031 Creditors’ Committee. Do his actions in the case, match what he told them? Don’t know yet, but will sure find out.
So Kevin Padrick packed his lunchbox and flew to each Board meeting for the next 16 months. By March 12, 2002, Stilwell entered into a standstill agreement with Oregon Trail. Among other things, Oregon Trail agreed to drop all lawsuits and Stilwell even got Oregon Trail to pay for his expenses incurred in the proxy fight. Where do these guys learn this stuff? They teach this at law school? There was also an agreement to keep one Board position filled with a Stilwell “lieutenant” for 5 Years.
On statements filed with the SEC, Stilwell’s goal in these proxy fights is always “to profit from the appreciation in the market price of the shares of Common Stock and through the payments of dividends by asserting shareholder rights“. Seems to me that Stilwell’s goal was to force a sale of the bank from the beginning because that is exactly what happened. In February 2003, Oregon Trail announced the sale of the bank to FirstBank NW Corporation of Lewiston, Idaho. The sale price was $22/share and it was completed by November 2003.
Padrick took his share of the sale soon after the announcement. Per Kevin Padrick’s filing with the SEC, his option price was $14.05/share. He exercised his options on 3/10/03 and immediately sold them for $23.05/share. So he netted $180,000 in a little over a year. Not too bad for experience building!
Kevin Padrick could just hang onto Stilwell’s coattails and make a wad of money!! But that wasn’t to be.
A review of SEC filings indicate that Stilwell pretty much dumped Padrick for his future proxy contests. He nearly pulled him in on the Board of American Physicians Capital, Inc. in 2002, but that never happened. All in all, it appears that Stilwell triggered proxy squabbles in 16 other publicly traded companies, but left Kevin Padrick in the dust.
Since Kevin Padrick could not ride that gravy train, he tried to do his own profit ventures. You saw what happened with Longview Fibre in 2006. Padrick and Obsidian Finance weren’t quite able to seal that deal, but what the heck – it was their first try. Give them a chance, they were on a learning curve.
Luckily, Kevin Padrick ran into the naive and trusting Summit principals in late 2008. They needed help. They were told Kevin Padrick and Obsidian Finance could help. Yeah, Kevin Padrick and Obsidian Finance helped shove them off a cliff! They sold themselves to the Summit Principals, they took their money, they took their priviledge information, they went to the other side with that money and they got themselves a more lucrative job. They also know there is no Ponzi Scheme and No Embezzlement, but that won’t stop them from using the Media to make a play for it. It won’t be an $850 Million they looked to get from the flip ofthe Longview Fibre shares, but the Summit 1031 deal is easy pickings. The money is just sitting there and there doesn’t appear to be anyone at the wheel for the Creditors!!!
With now one watching out for the 1031 exchangers, what do you think Kevin Padrick & Obsidian Finance will do? I think there may have been some dealing and wheeling on this case too. In Obsidian’s billings detail, I found early conversations with Steve Hedburg of Perkins Coie. I wonder what was said at these meetings. Who knows, but shortly after Perkins Coie was pushing to replace Terry Vance CRO (person in charge of liquidating) with Kevin Padrick. Sounds familiar doesn’t it?
Next POST – WHO IS Protecting Summit 1031 Exchanger Monies??? Who is representing the BEST Interests of the Summit 1031 Exchangers??? Can you figure this one out?"
Source of Above Kevin Padrick, Joseph Stilwell and Oregon Trail Financial Post
http://www.summit1031bkjustice.com/?page_id=1845
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