Days before a critical AGM a US Judge has slapped Politan Capital Management executives, who are trying to taker control of Masimo the Company that acquired Sound United with Contempt Of Court charges after they tried to use a confidential ruling to bolster their own claims in an effort to get their own representative a seat on the Masimo board and ultimate control of the Company.
U.S. District Court Judge James V. Selna slapped Politan and its Chief Investment Officer Quentin Koffey with a Contempt of Court charge after Masimo filed an emergency Masimo Ex Parte motion after Koffey issued a press release following an earlier confidential ruling.
On Friday Australian time Masimo’s Annual Shareholder meeting will take place when there is a possibility that the market will get to know the future for Masimo Consumer the division that sells Bowers & Wilkins, Denon and Marantz audio products.
For the last 12 months a proxy war between Koffey the CEO of Politan who is desperate to take control of the business that was founded by Masimo CEO Joe Kiani has been playing out to the determent of the consumer business who Koffey claims should be dumped at any price.
Kiani in a move to appease his aggressors spun the Company off into a separate entity earlier this year.
Judge Selna’s ruling showed some real anger at Koffey and Politan and he has scheduled a new hearing on the sanctions to be administered in the matter following the issuing of the Politan press release which the Koffey was punting on to bolster his position in the fight.
Earlier Masimo and its CEO Joe Kiani had gone to court to sue Politan and Quentin Koffey to try and prevent them from counting proxy votes that were obtained through the use of what Masimo claims is “incomplete and misleading proxy materials.”
They asked the Court for a preliminary injunction, seeking an order “enjoining Defendants [Politan] from voting any proxies solicited in violation of corporate laws in the USA.
Politan denied the allegations and fought the claims.
Judge Selna issued his ruling in a preliminary injunction, “under seal rulings” which meant it could not be made public.
Koffey and Politan management decided to give the judge a two-finger salute and immediately leaked information from the ruling with the issuing of a press release that revealed information contained in the ruling.
The reason the judge sealed the ruling was to enable both sides to read his ruling and if necessary, respond, as well as to determine whether there was any text in the ruling that was confidential or non-public and therefore needed to be redacted.
The Politan press release that is now the subject of concept of court hearings, which are serious charges, revealed that the judge had denied the Masimo motion for a preliminary injunction.
As soon as Koffey issued his press release Masimo filed an application for an order to declare Politan in Contempt of Court and for the issuance of sanctions – both monetary and non-monetary.
Masimo’s filing argued that this was a clear and “flagrant violation of this Court’s sealing order, a violation which has directly prejudiced Masimo in the ongoing proxy fight”
Masimo claimed that they can do nothing about this, as it must honor the court’s sealing order – rendering it unable to put out its own release with its own spin.
The judge responded holding Politan and Quentin Koffey in Contempt of Court by violating the Court’s sealed orders.
The judge pointed out that any reasonable person would understand that no portion of the sealed document could be disclosed without the permission of the Court.
It was also determined that Politan’s disclosure gave it an unfair advantage in the proxy fight because, so long as Masimo was bound by the sealing order, it could not meaningfully reply to Politan’s press release.
Judge Selna has scheduled another hearing on October 9, 2024, to determine the imposition of monetary or other sanctions against Politan and Koffey.
These sanctions could also include penalties against Politan’s attorneys.
Earlier this week Masimo filed a new document with the court, that proposes that the Court issues new sanctions against Politan and Koffey who should be ordered that they cannot use vote proxies received after its press release – or at least until it discloses it has been found in Contempt of Court.
The judge ruled against Masimo’s application.
Masimo believes that the stockholders are fatigued of this proxy fight and would prefer the vote to occur as presently scheduled.” tomorrow Friday 20th.
Masimo Corporation’s 2024 Annual Stockholder’s Meeting is set for Thursday, September 19, 2024. This proxy battle should end then.
