Harvey Entertainment Co., home to “Casper,” “Richie Rich” and other characters, ousted its top two execs, Jeff Montgomery and Greg Yulish, Monday and replaced them with former All American Communications CEO Tony Scotti and former MGM chief financial officer Mike Hope.
Scotti, who sold his syndie to Pearson last November for $550 million, has been hired as interim CEO for a six-month period to look over the company and advise the board on the company’s strategic alternatives, he said Monday.
That could include using Harvey as a vehicle to expand into entertainment, or selling it to another entertainment company, Scotti said, noting that at this stage he has no preference.
Hope, who quit MGM last year and is now a partner with Scotti in a new media investment venture, is to act as interim CFO.
No contract renewal
Harvey said in a statement Monday that CEO Montgomery and his CFO Yulish, won’t have their employment contracts re-newed when they expire April 17.
Montgomery, who owns 14% of the stock, built Harvey to its present level, having bought Harvey Comics from the Harvey family in 1989 and having incorporated the publicly-traded company.
But the stock price had not moved much in the past few years, despite Montgomery’s success in getting theatrical and direct-to-video “Casper” features made and released. Montgomery did not return calls Monday.
Harvey gave no reasons for the change, although Hope said in an interview the board had been unable to agree on the terms of a new employment contract for the two execs.
“We have a lot of respect for the guys who were here,” Scotti said, adding that Harvey looked like “a solid little nugget.”
People close to the situation said the push to replace Montgomery and Yulish was led by two Wall Streeters on Harvey’s board, Cruttendon Roth investment banker Michael Doherty and hedge fund manager Allen Raphael.
Both have known Scotti for many years and, like many on Wall Street, are big fans of his management abilities. Scotti built All American into a thriving television company before selling it to Pearson last year at a price that was substantially higher than All American’s stock price.
Harvey stocks up
Wall Street welcomed the news of Scotti’s appointment, sending Harvey stock up $1.25 to $14.
Scotti said he was approached by Doherty about assessing the management of Harvey. “They wanted us to come in and talk about what we can do to take the company to another level,” Scotti said.
Reached at his office Monday, Doherty said it would be “completely inappropriate to discuss any business” of the board. Raphael could not be reached and Montgomery did not return calls.
Doherty and Raphael would have needed support of Harvey’s biggest shareholder, Saudi prince Ahmad Bin Khalid Al-Saud, in their move against Montgomery and Yulish. The prince owns 29.9% of the stock and is represented on the board by an Oklahoma City attorney Gary Gray, who did not return calls seeking comment.
Aside from Gray, Doherty and Raphael, the only other directors on the board were Montgomery and Yulish.
After selling All American last November, Scotti has been looking at buying another company in one of many areas of the media industry, he said.
He and Hope formed a company known as Global Media Management Group LLC, which is negotiating acquisition of other companies currently, Scotti said, in areas that range from “manufacturing tapes to manufacturing satellites.”
Scotti said, “It’s possible (Harvey) will be the next vehicle.”
After buying Harvey Comics in 1989 and bringing in Universal Studios as a shareholder (U still owns 10%), Montgomery signed a deal with Haim Saban in 1996 for production of a direct-to-video “Casper” sequel. The pic, “Casper — A Spirited Beginning,” was released last year.
Harvey last year wrested away control of its licensing activities from Universal Studios, which holds the right to theatrical productions of “Casper.” U was also planning a theatrical sequel to “Casper.”