It has been 18 years and 47 days since the city’s pledge to build the West Branch Library.
On January 29, 2016 the Wall Street Journal (WSJ) ran a story about Jerry Moyes entitled When a CEO Borrows on his stock by Ted Mann, Robbie Whelan and Theo Francis. For those who don’t know or may have forgotten, Jerry Moyes is the founder, chairman and former CEO of Phoenix-based Swift Transportation, one of the largest trucking companies in the United States. Moyes is also owner of the charter airline Swift Air and a marina at Lake Powell. Moyes is the controlling owner of SME Steel Contractors Inc., a steel erector company based in Utah. He was a majority owner of the Phoenix Coyotes of the National Hockey League before he filed bankruptcy and the team was sold to the NHL in 2009, and the Arizona Sting of the National Lacrosse League. Moyes is also a limited partner in the Arizona Diamondbacks, and was once a minority owner of the Phoenix Suns.
Moyes is a Glendale resident best known for his bankruptcy filing of the NHL Coyotes in a failed attempt to sell the team to Jim Balsillie, one time CEO of Research in Motion (RIM), makers of the Blackberry cell phone. As a result of these manoeuvrings the team was eventually sold to the NHL and then the NHL sold the team to IceArizona resulting in a $15 million dollar a year management fee paid by the City of Glendale until recently.
The story relates the fact that Moyes has borrowed heavily against his shares of Swift Trucking. Demands for additional loan collateral were made and three times Swift’s board has taken action beneficial to Moyes in dealing with his loans. The board policy had been that senior directors could pledge no more than 20% of their stock for margin loans. In 2013, the cap was lowered to 15% as of July 2014 and then lowered once again to 10% as of July 2015. The board then amended the 10% limit from taking effect until the end of 2016. In 2015 Swift stock lost 52% of its value and as the stock value he had pledged as collateral declined he needed to pledge even more of his stock as further collateral.
However, his use of his stock as collateral exceeded the board’s limits. Other investors including the Teamsters’ Union are concerned with the board’s actions and accused Mr. Moyes of, “using Swift as his personal bank.”
According to the WSJ, “Swifts’ board is unusually small, just six members. To analysts of corporate governance, boards size matters: While too-large boards can be unwieldy, too-small boards can turn into echo chambers and foster an eagerness among directors to get along in the face of tough decisions.” It goes on to say, “the Phoenix-based company has just four independent directors, as defined by New York Stock Exchange rules. And one of those deemed independent, Mr. Dozer, spent years helping run a business that was partly owned by Mr. Moyes, the Arizona Diamondbacks. Mr. Dozer was the baseball team’s president from 1995 until 2006, and Mr. Moyes was a minority owner from 1996 until last year.” Hmm…It looks as if you own a company you can use it as your personal bank just a long as your close friends on a very small board approve.
© Joyce Clark, 2016
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Ha ha. That sounds just like the House banking and House Post office scandals back in the late 80s.
Dont forget the Feds forced him out of Swift once before. He got it back by stealing his kids trust fund money.
I remember what great friends he and Elaine were.
Then Elaine kicked him to the curb as soon as he needed help.
Would anyone care to elaborate on this?
The Truth, Hmmm…perhaps:-)
Well, didnt Moyes come to Glendale asking for a hand out close to what they offered the others since then? I believe there was one big issue, Moyes refused to open his books to the city to see if his claims were true?
I am guessing that after getting screwed by Elman for not asking him to prove he had financial backing, the COG was a little gun shy to give Motes a hand out? Moyes didnt want to open his books to show all the monkey business he was doing with money that was Coyotee money and how it may have found its way to Swift.
As James indicated above…. Jerry Moyes took out an $80 million loan using the Coyotes as collateral for his real estate endeavors.
He also propped up his Swift Air services by charging the Coyotes exorbitant charter fees. And moved the front office personnel from the arena where they had plenty of space to a building at Westgate he and his wife owned to charge above average rental rates.