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CUSIP No. 685932105 SCHEDULE 13D Page 16 of 19
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EXHIBIT 3
PETITION FOR ALTERNATIVE WRIT OF MANDAMUS,
DATED JANUARY 5, 2001
IN THE CIRCUIT COURT OF THE STATE OF OREGON
FOR THE COUNTY OF BAKER
State ex rel. STILWELL ASSOCIATES, L.P., |
| Case No. 01-014
Relator, |
| PETITION FOR ALTERNATIVE WRIT OF
v. | MANDAMUS
|
OREGON TRAIL FINANCIAL CORP., |
|
Defendant. |
TO: OREGON TRAIL FINANCIAL CORP.
On relation of Stilwell Associates, L.P. ("Stilwell Associates"), who
is the party beneficially interested, the State of Oregon alleges:
1.
This is a mandamus action brought by a shareholder to compel the
defendant, an Oregon corporation, to produce: (a) its "record of shareholders,"
(b) copies of any minutes and records of meetings and actions of the board of
directors, committees and shareholders, and any financial and accounting
records, relating to defendant's plans and goals with respect to increasing
shareholder value, and (c) other enumerated records required to be maintained by
corporations, pursuant to ORS 60.774(1),(2)(a) & (c), ORS 60.781, and Oregon
common law. This Court has jurisdiction over this mandamus proceeding pursuant
to ORS 34.120 and it is "well settled that mandamus is the appropriate remedy to
compel corporations to produce and allow an inspection of their books and
records at the suit of a stockholder * * *." Ralston v. Grande Ronde Hospital,
149 Or 47, 39 P2d 362, 363 (1934). See also Bernert v. Multnomah Lbr. & Box Co.,
119 Or 44, 247 P 155 (1926). Pursuant to ORS 60.781(5), a "shareholder's request
shall be set for hearing at the earliest possible time and shall take precedence
over all matters, except matters of the same character and hearing on
preliminary injunctions under ORCP 79(B)(3)." Venue is proper under ORS 14.080.
2.
Relator Stilwell Associates is a Delaware limited partnership located
at 26 Broadway, New York, New York 10004.
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3.
Defendant Oregon Trail Financial Corporation ("Oregon Trail") is an
Oregon corporation with its principal place of business in Baker City, Oregon.
4.
Relator is the record holder of 100 shares of common stock of Oregon
Trail and is a member of a group of related entities (the "Stilwell Group") who
together own 284,000 shares, or 8.5 percent, of the outstanding common stock of
Oregon Trail - its largest shareholder. (Attached hereto as Exhibit 1 is a copy
of the certificate of shares, dated November 30, 2000, held by relator,
evidencing its record ownership of 100 shares of Oregon Trail.) The entities
comprising the Stilwell Group have filed two Schedule 13D's with the Securities
and Exchange Commission disclosing their intention to exercise their rights as
shareholders of Oregon Trail in order to maximize the value of the defendant's
stock which they believe is performing poorly. Relator stated in the
aforementioned Schedule 13D's that it believes Oregon Trail should hire an
investment banker, invite major shareholders to sit on its board and address its
poor return on equity. The Schedule 13D's also stated that relator and the
Stilwell Group may in the future "communicate and discuss their views with other
shareholders, including discussions concerning the election of directors to the
Board * * * [and] seek representation on the [defendant's] Board * * * and/or *
* * solicit proxies."
5.
On December 26, 2000, relator, pursuant to ORS 60.774(1) & (2), served
upon Oregon Trail a written demand for inspection of: (a) its "record of
shareholders," (b) copies of any minutes and records of meetings and actions of
its board of directors, committees and shareholders, and any financial and
accounting records, relating to defendant's plans and goals with respect to
increasing shareholder value, and (c) other enumerated records required to be
maintained by corporations under ORS 60.771(5). Relator sought these items in
good faith for the purpose of communicating with relator's fellow shareholders
on matters of their mutual interest as shareholders, including communicating
with the shareholders regarding the opportunities for Oregon Trail to maximize
shareholder value. (A copy of the December 26, 2000, demand is attached hereto
as Exhibit 2.) See generally, Rosentool v. Bonanza Oil and Mine Corp., 221 Or
520, 529, 352 P2d 138, 142 (1960) (quoting with approval cases from other
jurisdictions for the proposition that "it is not improper to seek inspection
for the purpose of ascertaining the names and addresses of stockholders or
others having voting rights in order to be able to communicate with them or to
solicit proxies from them") (citation omitted); see also Bernert, 119 Or at
50-54 (discussing generally Oregon law regarding a shareholder's "good faith"
and "proper purpose"). With respect to the other enumerated records required to
be maintained by a corporation under ORS 60.771(5), pursuant to ORS 60.774(1)
defendant is strictly obliged to produce these records to relator irrespective
of the showing of any purpose.
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6.
Defendant refused to comply with the relator's demand within the
statutorily imposed deadline of five business days, (see ORS 60.774(1) and (2)),
and questioned whether relator is a record holder of shares (despite the
issuance of a certificate for shares to relator by defendant dated November 30,
2000). Upon defendant's request, relator provided defendant with a copy of the
share certificate, Exhibit 1, on January 3, 2001, but defendant has still failed
to comply with relator's demand.
7.
The Oregon statutes, as well as Oregon common law, provide that relator
is entitled to all of the information sought by relator herein. ORS 60.774(1),
(2)(a) & (c). Relator has articulated a proper and legitimate purpose -- to
communicate with fellow shareholders concerning maximizing the value of their
investment -- and defendant has no right to withhold the requested information.
8.
Defendant cannot justify its refusal to produce the records by claiming
that the relator is "unfriendly" to management. Id. ("The allegation that
plaintiff * * * [is] unfriendly to defendant states a fact insufficient as a
defense.") Moreover, the seeking of information by a shareholder which he may
use to promote plans opposed by management, or to oppose management, will
generally constitute a proper purpose. Purposes For Which Stockholder or Officer
May Exercise Right to Examine Corporate Books And Records, 15 ALR2d 11, ss. 16
(1951). Defendant's conduct not only disregards the clear legislative grant, as
well as undermining relator's property rights as a shareholder, but also unduly
prejudices relator from being able to communicate with other shareholders
concerning relator's genuine concerns about defendant's failure to maximize
shareholder value. See also Id. at ss. 7 (stockholders, as "beneficial owners of
the corporate assets," are "primarily interested in seeing that the concern is
efficiently and profitably managed * * * they are entitled to inspect the books
and records in order to investigate the conduct of the management, determine the
financial condition of the corporation, and generally take an account of the
stewardship of the officers and directors, at least where there are
circumstances justifying some suspicion of mismanagement.").
9.
Relator has no plain, speedy, or adequate remedy in the ordinary course
of the law.
10.
In addition to a writ mandating that defendant make available the items
described in Exhibit 2 for inspection by relator and its agents, relator is
entitled to an award of its costs and reasonable attorney fees, pursuant to ORS
60.781(3), incurred in seeking this writ.
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11.
WHEREFORE, relator petitions the Court to issue the writ directed to
defendant and commanding it as follows:
(a) Immediately on receipt of the writ to make available for inspection and
copying by relator and its agents the records and items described in Exhibit 2;
or, in the alternative;
(b) To appear before this Court or a judge hereof, at a time and place
specified by the Court, to show cause why it has not done as commanded; and
further
(c) To return the writ then and there, with its certificate annexed showing
that it has made available for inspection and copying by relator and its agents
the items described in Exhibit 2, or showing the cause of its omission to do so;
and
(d) To pay relator's costs and reasonable attorney fees.
DATED this 5th day of January, 2001
MILLER NASH LLP
/s/
-----------------------------------------------
John F. Neupert - Trial Attorney
Oregon State Bar No. 78316
Spencer L. Schneider, Esq.
Attorney at Law
145 Hudson Street
New York, New York 10013
Telephone: (212) 431-7151
Facsimile: (212) 431-7312
Attorneys for Relator Stilwell Associates, L.P.
