UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
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PEAK INTERNATIONAL LIMITED
(Name of Registrant as Specified in its Charter)
CHADWICK CAPITAL MANAGEMENT LLC
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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CHADWICK CAPITAL MANAGEMENT LLC
MONARCH ACTIVIST PARTNERS LP
4510 EXECUTIVE DRIVE SUITE 200
SAN DIEGO, CA 92121
March 12, 2008
Sent via email
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Board of Directors
Peak International LTD.
Flat E&F 19th Floor CDW Building
388 Castle Peak Road
Tsuen Wan, Hong Kong
Board of Directors:
Monarch Activist Partners (Monarch) and Ancora Capital (Ancora) are both
significant shareholders of Peak International (PEAK), each owning more than
5% of the company. As evidenced by this 13D filing, a group has been formed
with the company's largest shareholder (and director) Skiritai Capital. Both
Ancora and Monarch have individually articulated their concerns about the
strategic direction of the company, but have now lost faith in the board's
ability to exercise responsible business judgment and fulfill its fiduciary
responsibilities.
As significant investors we are growing increasingly alarmed by the
communication we are receiving from the company. In a letter to Monarch dated
February 2, 2008, Peak director Christine Russell wrote:
"At the same time we are also exploring ways to grow the top line through both
organic and inorganic means.".... "Dean (Peak's CEO) also remarked in the call
(3rd quarter conference call) that he believes the industry needs to be
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consolidated. To that end we are keenly interested in, and from time to time
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review, any opportunities, both buy or sell, that could enhance shareholder
value."
In addition, Monarch's Managing Partner James Chadwick has spoken to Ms.
Russell and she mentioned the possibility of driving value to Peak's
shareholders through acquiring other companies and consolidating the
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fragmented industry.
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It is unconscionable that any Board member could speak about acquisitions when
the CEO (as of the last investor call) had not even presented a turn-around
plan to the Board to stem the company's dismal operating performance and cash
bleeding. As a responsible fiduciary you would expect a plan to be on its way
to execution by the time of an investor call that reports a continuing decline
in the business. However, in Peak's case a plan had not even been delivered to
the Board (according to Dean Personne's statement) despite several quarters of
lost revenue and a declining cash position. The Board as characterized by Ms.
Russell's statement not only lacks a sense of urgency, but is completely
misguided in thinking that the current operators who have failed to deliver
results for Peak shareholders should be in any position to consolidate
companies into Peak.
Ms. Russell is a CFO of a public company (Virage Logic Corporation, ticker
"VIRL"), however her statement suggests she may need to revisit Finance 101.
Peak trades at 0.3x book value and nearly a negative enterprise value, making
its equity useless as currency for an acquisition. If she intends to use the
only attractive asset the company has, its cash, for acquisitions then she
would not only eliminate the single stellar attribute of the company, but take
away a valuable resource often required in turnarounds. We are astounded by
her lack of ability to apply basic financial principles to PEAK's current
predicament.
The fact that she as a Board member isn't solely focused on turn-around
efforts is truly scary and speaks to how misguided the Board is in setting
strategic direction.
Since the Board appears to have appointed Ms. Russell as their spokesperson,
we can only assume her views represent that of the rest of the Board (except
for Mr. Silvestri). By failing to act quarter after quarter to right the
business and instead speak of acquisitions as if the company were operating in
some other universe, we have come to the firm conclusion that the Board is not
in the least concerned about protecting shareholder value. By failing to right
size the business and cut costs to mitigate the company's cash burn we believe
that the Board members are in breach of their fiduciary responsibilities and
need to step down immediately.
As the current Board appears to be unwilling to step down we are seeking to
replace the existing Board, except for Russ Silvestri, with new directors who
represent significant shareholders and will do right by the vast majority of
Peak's investors. We hope the current Board will not opt to go forward in a
protracted battle as it has done enough to erode value. It is time for
individuals with a stake in the company's future to have a say in how it
operates. We have already spoken to and identified shareholders who represent
what we believe to be 40-45% (including ourselves and Skiratai) of the
Company's outstanding shares who would vote for our proposals. We believe that
a proxy solicitation will easily put us over the 50% level needed to remove
the current Board members and replace them with our nominees. Therefore, any
action taken by the current Board to oppose us and block our efforts will
simply be self-serving entrenchment. All of the current directors face
continuing embarrassment as a result of their inaction and the prospect of
looming litigation should the current Board fail to turn the company around.
We hope you give this letter careful deliberation and for once in your tenures
as directors do the right thing and let the company's owners take the helm as
fiduciaries.
Sincerely,
/s/ James Chadwick
James Chadwick
Managing Partner
Monarch Activist Partners LP
/s/ Richard Barone
Richard Barone
Chairman
Ancora Advisors, LLC
IMPORTANT INFORMATION
Chadwick Capital Management LLC, Monarch Activist Partners LP, James Chadwick
and Sohail Malad (collectively, the "Monarch Participants"); SKIRITAI Capital
LLC, Leonidas Opportunity Fund L.P., Leonidas Opportunity Offshore Fund Ltd.,
Russell Silvestri and Lyron L. Bentovim (collectively the "SKIRITAI
Participants"); and Ancora Capital, Inc., Ancora Securities Inc, Ancora
Advisors LLC, Ancora Trust, the Ancora Mutual Funds, Ancora Foundation, Merlin
Partners, Richard Barone and John Micklitsch (collectively, the "Ancora
Participants," and together with the Monarch Participants and the SKIRITAI
Participants, the "Participants"); are participants in the solicitation of
shareholders of Peak International Limited.
The Participants intend to file a proxy statement with the Securities and
Exchange Commission relating to a solicitation of proxies from the
shareholders of Peak International Limited in connection with the special
meeting of shareholders that has been demanded by certain of the Participants.
SECURITY HOLDERS ARE ADVISED TO READ THAT PROXY STATEMENT WHEN IT BECOMES
AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. The proxy statement
along with any other relevant documents will be available for free at
www.sec.gov. You may also obtain a free copy of the proxy statement, when it
becomes available, by contacting Russell Silvestri at 415-391-5929, or by
sending an email to rsilvestri@skiritai.com. Quantified information relating
to the security holdings of the Monarch Participants may be found in the
Schedule 13D of the Monarch Participants originally filed on February 23,
2007, as amended December 4, 2007, and March 12, 2008 and as it may be further
amended. Quantified information relating to the security holdings of the
SKIRITAI Participants may be found in the Schedule 13D of the SKIRITAI
Participants originally filed on September 22, 2005, as amended September 26,
2005, February 13, 2006, February 8, 2007, March 7, 2008 and March 12, 2008
and as it may be further amended. Quantified information relating to the
security holdings of the Ancora Participants may be found in the Schedule 13D
of the Ancora Participants originally filed on January 24, 2008, as amended
March 12, 2008 and as it may be further amended.