THE
CHARMING SHOPPES FULL VALUE COMMITTEE COMMENTS ON LAWSUIT
Calls
Frivolous Claims a Vain Attempt to Disenfranchise Shareholders and Distract
Attention From the Severe Operational and Financial Problems Plaguing Charming
Shoppes
NEW YORK, NY – MARCH 10, 2008 -
The Charming Shoppes Full Value Committee (the “Committee”) today
commented on the lawsuit filed by Charming Shoppes, Inc. (“Charming Shoppes” or
the “Company”) (NASDAQ:CHRS) alleging that members of the Committee filed
materially misleading and incomplete documents with the Securities and Exchange
Commission. After reviewing the complaint, the Committee has
concluded that the lawsuit is without merit and a baseless attempt by the
Company to abuse the court process to usurp corporate democracy and
disenfranchise shareholders.
The
Committee also notes that Dorrit J. Bern, Charming Shoppes’ Chairman of the
Board, President and Chief Executive Officer, who has watched over years of
disastrous stock performance and sub-par operating performance at the Company,
is up for election as a director at the 2008 Annual Meeting. In
bringing such a groundless lawsuit, the Committee believes that Ms. Bern and the
Company are improperly wasting corporate assets at the expense of shareholders
in a last-ditch attempt to entrench Ms. Bern and other Board
members. The Committee believes it is rather ironic that the Company
is alleging that the Committee is trying to “achieve personal gain at the
expense of Charming Shoppes and its shareholders” when, in fact, the Committee
is trying to protect the interests of all shareholders from a Board of Directors
that has awarded the Company’s top five executive officers, including Ms. Bern,
more than $45 million in compensation over the last three years, despite the
Company’s poor track record and disastrous stock performance. In the
past 12 months alone, the Company’s stock has fallen almost 60%. The
Committee notes that Ms. Bern, herself, was recently awarded a new three-year
contract with a 24% increase in compensation and substantial increase in the
number of options and shares received.
Commenting
on the lawsuit on behalf of the Committee, Eric Rosenfeld, President and CEO of
Crescendo Partners stated, “The Committee is committed to standing up for and
protecting the rights of all shareholders and this lawsuit will in no way deter
us and the other shareholders from expressing our views in a democratic
process. We only wish the Board and management of Charming Shoppes
would focus their energy and resources on improving the business rather than
spending shareholders’ money on this frivolous lawsuit. We urge all
shareholders to ask themselves whose interests Ms. Bern and the Company are
really trying to protect.”
CERTAIN
INFORMATION CONCERNING THE PARTICIPANTS
The
Charming Shoppes Full Value Committee (the “Committee”), together with the other
participants named herein, intends to make a preliminary filing with the
Securities and Exchange Commission (“SEC”) of a proxy statement and an
accompanying WHITE proxy card to be used to solicit votes for the election of
its slate of nominees at the 2008 annual meeting of shareholders of Charming
Shoppes, Inc., a Pennsylvania corporation (the “Company”).
THE
COMMITTEE ADVISES ALL SHAREHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT
AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO
CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THE PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY
STATEMENT WITHOUT CHARGE UPON REQUEST.
The
participants in the proxy solicitation are Crescendo Partners II, L.P., Series
Q, a Delaware limited partnership (“Crescendo Partners II”), Crescendo
Investments II, LLC, a Delaware limited liability company (“Crescendo
Investments II”), Crescendo Partners III, L.P., a Delaware limited partnership
(“Crescendo Partners III”), Crescendo Investments III, LLC, a Delaware limited
liability company (“Crescendo Investments III”), Myca Master Fund, Ltd, a Cayman
Islands company (“Myca Master Fund”), Myca Partners Inc., a Delaware corporation
(“Myca Partners”), Eric Rosenfeld, Arnaud Ajdler, Michael Appel and Robert
Frankfurt.
Crescendo
Partners II beneficially owns 7,354,125 shares of Common Stock of the
Company. As the general partner of Crescendo Partners, Crescendo
Investments II may be deemed to beneficially own the 7,354,125 shares of the
Company beneficially owned by Crescendo Partners II.
Crescendo
Partners III beneficially owns 378,275 shares of Common Stock of the
Company. As the general partner of Crescendo Partners III, Crescendo
Investments III may be deemed to beneficially own the 378,275 shares of the
Company beneficially owned by Crescendo Partners III.
Eric
Rosenfeld, as the managing member of Crescendo Investments II, which in turn is
the general partner of Crescendo Partners II, may be deemed to beneficially own
the 7,354,125 shares of the Company owned by Crescendo Partners
II. Additionally, Eric Rosenfeld, as the managing member of Crescendo
Investments III, the general partner of Crescendo Partners III, may be deemed to
beneficially own the 378,275 shares of the Company owned by Crescendo Partners
III.
Myca
Master Fund beneficially owns 1,523,405 shares of Common Stock of the
Company. As the investment manager of Myca Master Fund, Myca Partners
may be deemed to beneficially own the 1,523,405 shares of the Company
beneficially owned by Myca Master Fund.
Robert
Frankfurt, as the President of Myca Partners, the investment manager of Myca
Master Fund, may be deemed to beneficially own the 1,523,405 shares of the
Company beneficially owned by Myca Master Fund. Additionally, Robert
Frankfurt, as a member of a “group” for the purposes of Rule 13d-5(b)(1) of the
Securities Exchange Act of 1934, as amended, may be deemed to beneficially own
the 7,354,125 shares owned by Crescendo Partners II and the 378,275 shares owned
by Crescendo Partners III. Mr. Frankfurt disclaims beneficial
ownership of the shares owned by Crescendo Partners II and Crescendo Partners
III.
Arnaud
Ajdler owns 15,000 shares of Common Stock of the Company. As a member
of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act
of 1934, as amended, is deemed to beneficially own the 7,354,125 shares owned by
Crescendo Partners II, the 378,275 shares owned by Crescendo Partners III and
the 1,523,405 shares owned by Myca Master Fund. Mr. Ajdler disclaims
beneficial ownership of the shares owned by Crescendo Partners II, Crescendo
Partners III and Myca Master Fund.
Michael
Appel, through the Michael Appel Rollover IRA account, owns 10,000 shares of
Common Stock of the Company. As a member of a “group” for the
purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended,
is deemed to beneficially own the 7,354,125 shares owned by Crescendo Partners
II, the 378,275 shares owned by Crescendo Partners III and the 1,523,405 shares
owned by Myca Master Fund. Mr. Appel disclaims beneficial ownership
of the shares owned by Crescendo Partners II, Crescendo Partners III and Myca
Master Fund.