Albert Lord appointed as executive chairman of lender Sallie Mae
30 Nov 2007
Student lender Sallie Mae announced on Wednesday 28 November that Albert Lord has been appointed its executive chairman. Lord assumes principal executive management responsibility and will continue to serve as chairman of the board.
C E Andrews will continue as chief executive officer and report to Lord, who was previously Sallie Mae''s CEO. Lord will be paid $3 million a year in cash for two years, and will be entitled to additional awards depending on the value of the company''s stock.
Sallie Mae is embroiled in a court battle with an investor consortium led by private equity firm JC Flowers & Co, who agreed to buy the student lender for $25 billion or $60 a share in cash last April, but later asked a court to declare that it is not obligated to proceed with the deal.
It has filed a lawsuit seeking a break-up fee of $900 million from the consortium, which also includes banks JP Morgan and Bank of America. The consortium says Sallie Mae suffered a “material adverse change“ to its business owing to a serious credit market squeeze and legislation that slashes subsidies to student lenders. Sallie Mae disagrees. The lawsuit seeks a declaration that the buyer group has reneged on the original merger agreement, because there has been no material adverse change.
