Greek shipowner George Economou has filed a lawsuit in the Marshall Islands against fellow capesize specialist Seanergy Maritime, its supremo Stamatis Tsantanis and other directors for seizing control of the company by creating “super-voting” shares.
Seanergy chairman and chief executive Tsantanis maintains substantial control and influence over what is going on at Seanergy via a sufficient number of common shares and Series B preferred shares he picked up in December 2021 for $250,000.
Specifically, Senergy issued 20,000 “super-voting shares” to Tsantanis, granting him 49.99% of the voting power over the company. Before that transaction, Tsantanis, with about 2% of Seanergy’s voting power, was the company’s single largest shareholder.
Economou claimed, among other things, that the move allowed Tsantanis and other directors to cement themselves at Seanergy’s top and that it “disenfranchised outsider stockholders, had no economic rationale, and gave Tsantanis and other members of the board perpetual control over Seanaergy without obtaining a control premium for the company’s outsider stockholders”.
In a filing to the US Securities and Exchange Commission Economou said that Seanergy directors Christina Anagnostara, Dimitrios Anagnostopoulos, Elias Culucundis, Ioannis (John) Kartsonas who together own about 5% of the company, had put their own interests and the interests of Tsantanis above the company’s interests, thereby breaching their fiduciary duties and causing continued harm to his investment vehicle Sphinx.
Economou maintained that had control of the company been widely auctioned, it would have fetched a massive sum.
“At the time of the Series B issuance, Seanergy had about $487m in total assets. Based on Seanergy’s stock price, buying 49.99% voting power on the open market would have cost about $90m or more.”
Economou further aimed Tsantanis for having taken personal advantage of Seanergy’s artificially depressed share price by purchasing large amounts of common stock on the open market.
“Incidentally, that the board expropriated control for the benefit of Tsantanis in particular only added insult to injury. In his decade-plus in charge, Tsantanis has overseen a historic destruction of shareholder value. When he took the reins, Seanergy’s stock traded at around $20,000 per share. Under his “leadership,” the stock price has cratered. Despite four price-boosting reverse stock splits, today the stock trades at around $8 per share. Given this performance, investors reasonably might have expected the board to have removed Tsantanis long ago. Instead, it siphoned voting power from the public stockholders and delivered Tsantanis a multi-million dollar windfall,” a filing to the Marshall Islands High Court said.
Athens-based Seanergy operates a 17-vessel-strong fleet consisting of one newcastlemax and 16 capes. Economou bought into the company late last year and has since accumulated about 9.5% of Seanergy stock through Sphinx.
Sphinx has announced its intention to launch a proxy contest to nominate new directors at the 2024 annual meeting of shareholders, but stressed that the board has “rendered the votes of all outside stockholders meaningless” and is now suing to void and cancel the Series B preferred stock and to prohibit Tsantanis from exercising his voting rights.
