SAN DIEGO — An offer by Canadian financier Dallas Stanley to purchase a $1.5-million note owed by beleaguered Crown Bancorp expired late Wednesday without any response to the proposal from Crown management, according to Stanley's attorney.
Stanley's offer also included an immediate cash infusion of up to $35,000 to "cure" what attorney Roy Bell said was Crown's recent technical default on the note.
The note is owed to Canadian Commercial Bank in Liquidation and is secured by the stock of Crown's two subsidiaries--Bank of Coronado and Capital Bank of Carlsbad. Bell said that Stanley is concerned that the noteholder could either foreclose on the two banks or "give an unfriendly raider the note."
Crown President J. Michael Justice would not comment on the proposal or on Bell's charge that the company was not negotiating in "good faith."
Justice also would not confirm whether the note was in default.
Stanley's proposal was to buy the $1.5-million note in exchange for company stock and two seats on Crown's board. In addition, Stanley would make his "best efforts" to secure $2.5 million in much-needed capital through a stock underwriting offer, which he would coordinate.
The offer was made on Sept. 26, with an original deadline of Oct. 6, Bell said. The proposal was first extended until Oct. 31, then Nov. 3 and, finally, until 5 p.m. on Wednesday.
"The offer has expired," Bell said at 5:13 p.m. Wednesday. "We are not going to go through any more negotiations . . . the deal is no longer on the table. Crown's controlling directors (three of the seven directors are dissidents) will be judged by other people, based upon what they did or did not do with this transaction."
Stanley, 54, owns Stanley Group Ltd. in Vancouver and describes himself as a corporate turnaround specialist and financier. He is also chairman of First Western Communications Corp., a publicly traded insurance company.
Crown Bancorp management has been at war with a group of dissident shareholders since last spring, when the dissidents began a proxy solicitation drive.
Management contested the election of the dissidents and lawsuits were filed by both sides.