Missouri judge clears path for Epiq Systems proxy battle

A Missouri judge has cleared the way for a shareholder battle over control of Kansas City, Kan.-based Epiq Systems.

The decision Tuesday by Jackson County Circuit Judge Joel P. Fahnestock allows a New Orleans-based investment firm to seek shareholder votes for the slate of directors it nominated for Epiq’s board. The slate from St. Denis J. Villere & Co. LLC would oppose the slate of directors to be nominated by the current board.

Shareholders would vote at Epiq Systems’ annual meeting, but a date for the meeting has not been announced. Each side will present its case to shareholders through competing proxy statements in what is often called a proxy battle.

In an emailed statement, Epiq spokeswoman Kelly Bailey said, “We disagree with the court’s ruling and intend to appeal the decision. We will continue to act in the best interests of our shareholders and address these issues leading up to our next annual meeting.”

This week’s court ruling capped nearly two years of tension between the company and Villere in New Orleans. The 105-year-old investment company has owned shares in several Kansas City area companies over the years, including H&R Block, Garmin, Cerner, Kansas City Southern and DST Systems.

“This isn’t something we do lightly,” George Young, a Villere partner, said Wednesday of the proxy battle with Epiq. “This is the first time we’ve ever done this.”

Young said Epiq is a “good company with bad management.” He complained that Epiq’s businesses — in helping manage electronic discovery in court cases and managing bankruptcy cases — are good but not managed efficiently.

Epiq has made some management changes under pressure from shareholders, including a June 2012 vote against executive pay packages that was not binding on the company. Young acknowledged the changes but added that Tom W. Olofson is still chief executive officer, a post he assumed in July 1988 when he acquired Epiq Systems before it became a publicly traded company in 1997.

The court ruling affirmed that Villere had properly ended a November 2014 standstill agreement it had with Epiq. The agreement had allowed a Villere-named director to join Epiq’s board and required the investment firm to vote for the company’s other directors.

This story was originally published April 6, 2016 at 11:50 AM with the headline "Missouri judge clears path for Epiq Systems proxy battle."