BY GEERT De LOMBAERDE
This story first ran in our sister publication the Nashville Post.
Four AAC Holdings directors resigned, effective immediately, last week, leaving the Brentwood-based addiction treatment provider with just three board members and running afoul of stock market listing rules.
The quartet that resigned last Tuesday are:
• Darrell Freeman, the former owner of tech staffing company Zycron Inc. and two-term chairman of the Nashville Area Chamber of Commerce. Freeman joined the AAC board in early 2013 and had been its lead independent director since mid-2014, before the company listed its shares one the New York Stock Exchange.
• Larry Cash, the former CFO of Community Health Systems who had been an AAC director since 2017
• Michael Blackburn, AAC’s senior vice president of business development until 2017 who joined the board shortly after retiring from that role
• David Hillis, the former chairman and CEO of AdCare, which AAC acquired in early 2018 for about $85 million.
In a brief filing with the Securities and Exchange Commission, AAC said the directors’ resignations are not the result of any disagreement with the company. AAC officials or spokespeople could not be reached Tuesday morning to provide more context as to the departures, which leave only Chairman and CEO Michael Cartwright, veteran local investor Lucius Burch III and Vaco Holdings CEO Jerry Bostelman on the company’s board.
The exit from the board of Freeman, Cash, Blackburn and Hillis comes four months after former Gaylord Entertainment CFO David Kloeppel relinquished his seat, saying he wanted to spend more time on his growing Groups360 travel and hospitality technology business. Kloeppel’s exit in turn came just a few weeks after Cartwright presented to investors a vision of a radically overhauled AAC that de-emphasizes the addiction treatments in which it specializes today in favor of a more retail-oriented business doing diagnostic and genetic testing.
The directors’ departures leave AAC’s board without an audit committee as Cash and Freeman had been that group’s only members. To that end, the company is now violating an NYSE rule and said Tuesday morning it is in talks about a plan to remediate that.
Shares of AAC (Ticker: AAC) ended Monday trading at 66 cents, down about 1 percent on the day. They have lost two-thirds of their value in the past six months and are down 90 percent year over year. The company’s market value is now about $16 million. Both that number and the share price of less than $1 fall short of the NYSE’s listing regulations.