Arcturus Board Schedules New Proxy Showdown with Ousted CEO

After postponing a May 7 shareholder vote in a power struggle for control of San Diego’s Arcturus Therapeutics (NASDAQ: [[ticker:ARCT]]), the company’s board of directors has set a new date for its showdown with ousted CEO Joseph Payne.

In a statement Monday, Arcturus said it has rescheduled its special shareholder meeting for 10 a.m. on June 25 at the San Diego office of the Cooley law firm, its corporate counsel in the U.S. The four-member board decided last month to postpone the May 7 shareholder meeting.

The board has been locked in a power struggle with the ex-CEO since they fired Payne in January. In a subsequent lawsuit against Payne, the Arcturus board alleged that as CEO, Payne tried to mislead them about his attempt to transfer a potentially valuable drug development program to a friend’s biotech company for free.

Payne, who co-founded Arcturus and still holds a 13.7 percent stake in the company, has called the board’s allegations “baseless and defamatory.” He mounted a proxy challenge that asks shareholders to replace the incumbent board with an alternative slate of four directors. Payne also filed a lawsuit in Israel against the four Arcturus directors, alleging they had breached their fiduciary duty to shareholders.

Arcturus shareholders will vote on two competing sets of proposals at the June 25 meeting. The first three proposals were submitted by Payne, and would remove the four current board members: Stuart Collinson, Craig Willett, Daniel Geffken and David Shapiro; clarify the rules for electing board members; and elect four new members to the Arcturus board: Peter Farrell, Andrew Sassine, Magda Marquet, and James Barlow.

A competing proposal submitted by the current Arcturus board would remove Payne from his role as a director on the board of Arcturus Therapeutics Ltd., an Israeli holding company that operates Arcturus Therapeutics Inc., the San Diego biotech.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.