Investor to Noble Roman's: Are you kidding?

A fund with a 14.3 percent stake in Noble Roman's has sent a letter to the pizza chain’s directors, blasting the board’s structure as “bizarre” and condemning management’s recent results.

Privet Fund Management said it decided to write after learning that Jeffrey Gaithers had resigned as a director. “The fact pattern would suggest that Mr. Gaither wishes to dissociate himself from the actions of this board and management team,” read the letter, which was signed by Privet principals Ryan Levenson and Ben Rosenzweig. “We cannot blame him.”

The pair notes that Gaithers’ resignation leaves four people on the board, two of whom are related. Yet the four directors are divided into three classes, apparently with differences in authority and privileges.

They also faulted Chairman Paul Mobley for some of his public comments on the state of the business. For instance, they wrote, Mobley indicated in March 2014 that the chain would open 70 units in 2015. For the next 20 months, Levenson and Rosenzweig said, Mobley reaffirmed that target. Yet only 17 actually opened, they assert.

“The history of our interactions [with the board] and the board's behavior gives us little confidence that their fiduciary duties are being taken seriously,” the letter concluded. “Prove us wrong.”

Noble Roman's has yet to respond publicly to the communication, which was aired by Privet on various news services.


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