Let me add my perspective as a lawyer and one who represents a lot of "start ups". It is not at all unusual to see the company's lawyer on the Board or even to see the company's lawyer recompensed in stock and/or cash. This situation was not concealed from anyone. Its well documented in the company's annual reports, etc. That being said, having Mr. Kemp sit on the Board and having his firm provide legal services for the Company does create an APPARENT conflict of interest. Under the rules of the legal profession, there are many shades to conflicts type issues. I would also note that Mr. Kemp seems not to have insisted that his firm alone provide all the legal services needed to the company since there are other lawyers working on matters for the company, including, as I understand it, the ASC matter.
Having an apparent conflict and a real one are two different things. (I would say that Matt's undisclosed economic interest in J/Lwas a matter of a different stripe entirely.) I would say so far that Mr. Kemp is responsible for a much more free flow of information from the Company and a much more well organized operation based upon my conversations with people at, or close to, the company. I would also say that Walker & Co. is a very respectable firm by all accounts and I think for $200,000.00 in legal work (which sounds like a lot but is not), they are not about to put themselves in a compromising position.
We should not overlook the fact that Mr. Kemp has an apparent conflict and that we should be on guard to see it does not become a problem. Perhaps legal hiring should be done by a comittee of the BOD without Mr. Kemp's vote. There are a number of ways to address the issue. In fact, it may have already been addressed. We don't know. I will try to find out.
I would also point out a couple of other points to those who ask: "Where was Kemp before?" First, you must keep in mind that a lawyer is responsible to lay out the legal options in any matter where advice and counsel is sought BUT the client is ultimately responsible for deciding the course of action which is followed or pursued. Therefore (and I speak from bitter personal experience here) Mr. Kemp may have been properly advising the company all along but if the CEO is ignoring that advice, there is little as a lawyer (and probably as a Board member either with only one vote) he can do. We should also remember that Kemp is but one vote on the Board. In my opinion, it is most likely that the members of the Board (led by Mr.Kemp and pressured by large shareholders ) got tired of being ignored when it came to the way "Club Jimmy" was run. They finally decided to do the right thing for the company. Now we might second guess the timing as hindsight is ALWAYS 20/20, but the result so far has been positive in my opinion. As I have posted before, I will keep my six guns holstered for now and give the new team a chance to finish what they started.
Finally, it is my understanding that Mr. Kemp's position is temporary. he is local and able to run the operation locally. I think he was a logical choice. All in all, I think we should cut Mr. Kemp some slack for a few months and see what happens now that he has stood up and acted in the best interest of the Company. I doubt very much that he actually relishes having to be in this position. JLA |
