New Charter Is Approved for Care Enterprises

Shareholders of Care Enterprises, the nation’s fourth-largest nursing home operator, approved a new corporate charter Thursday that one company founder contended will strip minority shareholders of their rights.

By a margin of more than 2 to 1, holders of both classes of Care’s common shares endorsed a plan to reincorporate the company in Delaware, adopting at the same time a series of changes designed to stymie hostile takeovers.

The bulk of the shares that voted against the proposal is held by Care co-founder Ted Nelson, who last month resigned as a director of the Laguna Hills-based company in protest of the reincorporation.

Nelson owns 22% of Care’s class B common stock and another 21% of its class A shares, which carry a 1/10 voting right. Together, his two half-brothers, Dee Bangerter and Lee Bangerter, Care’s chairman, hold 45% of the class B shares and 37% of the class A shares.

Though not present at the meeting, Nelson had argued that the reincorporation was unfair because it would enable current management to “maintain control of the company to the exclusion of, and with virtually no accountability or responsiveness to, minority shareholders,” according to Care’s proxy statement.

In an interview Thursday, Lee Bangerter denied as “totally misstated” rumors of a rift between the Bangerters and Nelson. Despite speculation that the three men are split over Winn Enterprises, a Los Angeles holding company they control, Bangerter said: “We are totally in agreement on Winn Enterprises.”

Under Care’s new charter, the vote of a 75% majority of shareholders will be required to change the company’s by-laws, or to oust directors, who under the new rules will serve staggered, two-year terms.

Because approximately 66% of Care’s outstanding shares are held by its three founders, industry analysts said that the company was not vulnerable to an unfriendly merger. However, Lee Bangerter said that because nursing home companies may eventually become takeover targets, “we have to think about the future.”