SCHEDULE 13D/A: Activist Investor Ned Sherwood Initiates Consent Solicitation for Board Control at Barnwell Industries Amid Governance Dispute

Activist investor Ned L. Sherwood and affiliated entities are launching a consent solicitation to nominate five directors to the board of Barnwell Industries Inc., citing the company's resistance to shareholder choice and its rejection of prior board nomination proposals.

Summary

• Ned L. Sherwood and affiliated entities (MRMP-Managers LLC and Ned L. Sherwood Revocable Trust) collectively beneficially own 3,006,033.138 shares, representing approximately 29.90% of Barnwell Industries Inc.'s outstanding common stock.
• The Reporting Persons are initiating a consent solicitation to elect five nominees to the Board of Directors of Barnwell Industries Inc.
• This action follows the termination of a Cooperation & Support Agreement and the Company's rejection of proposed amendments and a formal nomination notice submitted by the Reporting Persons on February 14, 2025.
• Barnwell Industries Inc. indicated it was "strongly inclined to declare the [Advance Notice] invalid and disqualify the Sherwood Nominees," which the Reporting Persons view as an attempt to disenfranchise shareholders.
• The five proposed nominees are James C. Cornell, Heather Isidoro, Stuart I. Oran, Ned L. Sherwood, and Gregory W. Sullivan, bringing over 172 years of combined experience.
• Four of the five nominees are completely independent from the Reporting Persons.
• MRMP-Managers LLC has agreed to cover the costs of the consent solicitation and indemnify the nominees against potential litigation related to their nomination.
• The Reporting Persons explicitly state they have no current intent to engage in a control transaction.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the escalating conflict between a significant shareholder and company management, indicating a breakdown in corporate governance and potential for a costly and distracting consent solicitation. While the activist aims for improvement, the immediate situation is contentious.

Positives

• Shareholders are being offered a choice for the company's future direction through the consent solicitation.
• The proposed slate of five directors brings over 172 years of combined experience, potentially enhancing board expertise.
• Four out of five proposed nominees are independent from the Reporting Persons, suggesting a focus on broader shareholder interests.
• The Reporting Persons are covering the costs of the consent solicitation and indemnifying nominees, reducing financial risk for the nominees.

Negatives

• Barnwell Industries Inc. has resisted shareholder proposals, including rejecting amendments to a Cooperation & Support Agreement and finding fault with a formal nomination notice.
• The Company's response to the nomination notice suggests an intent to "disqualify the Sherwood Nominees" and "disenfranchise shareholders," indicating a contentious relationship with a significant shareholder.
• The situation is escalating into a consent solicitation, which can be costly and distracting for both the company and shareholders.
• The termination of the Cooperation & Support Agreement indicates a breakdown in prior attempts at collaboration.

Risks

• Shareholder Disenfranchisement: The Company's stated inclination to declare the Advance Notice invalid and disqualify nominees poses a risk to shareholder rights and representation.
• Costly Proxy/Consent Fight: The initiation of a consent solicitation indicates a potential for a prolonged and expensive battle for board control, which could divert resources and attention from core business operations.
• Board Instability: A contested board election could lead to instability in corporate governance and strategic direction.
• Litigation Risk: The nominee agreements include indemnification for litigation, indicating an expectation or possibility of legal challenges related to the consent solicitation.

Future Outlook

The Reporting Persons intend to proceed with a consent solicitation to allow Barnwell Industries Inc. stockholders to choose the Company's future path by electing a new slate of directors. They will file a consent solicitation statement and other materials with the SEC, and affirm no current intent to engage in a control transaction.

Management Comments

• Barnwell Industries Inc. has not announced its annual meeting and has not accepted the amendments proposed by the Reporting Persons.
• The response from Barnwell was to find fault with the form and content of the Advance Notice, and to ominously note that it 'is strongly inclined to declare the [Advance Notice] invalid and disqualify the Sherwood Nominees.'
• In essence, the response was that Barnwell stockholders should not have a choice.

Industry Context

This filing reflects a growing trend of shareholder activism in the U.S. market, where significant shareholders leverage their ownership stakes to influence corporate governance and strategic direction, particularly when they perceive management as unresponsive or underperforming. The use of a consent solicitation, rather than a traditional proxy fight, indicates an attempt to bypass the company's annual meeting schedule and accelerate changes, a tactic often employed by activist investors seeking more immediate impact.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• The nominee agreements include provisions for indemnification against losses incurred if nominees become a party to litigation related to their nomination or the consent solicitation, indicating a potential for legal disputes.

Related Party Transactions

• NA

Stakeholder Impact

• Shareholders: Potential for significant changes in corporate governance and strategic direction. The consent solicitation offers shareholders a direct vote on board composition, but also introduces uncertainty and potential for a prolonged dispute.
• Management/Current Board: Faces a challenge to their control and strategic vision, potentially leading to increased pressure and scrutiny.
• Employees: Could experience uncertainty regarding future company direction and leadership.
• Creditors/Suppliers/Customers: May face increased uncertainty regarding the company's stability and future business relationships during a period of contested governance.

Next Steps

• The Reporting Persons will file a consent solicitation statement and other materials with the SEC.
• The Reporting Persons will conduct a consent solicitation to elect their five nominees to the Board of Directors.
• The Company is expected to respond to the consent solicitation, potentially challenging its validity or launching its own counter-campaign.

Key Dates

Recommendation

Keywords

Barnwell Industries Inc., BARNWELL, Ned L. Sherwood, MRMP-Managers LLC, Schedule 13D, Consent Solicitation, Shareholder Activism, Board Nomination, Corporate Governance, Proxy Fight, Director Election, Shareholder Rights, Activist Investor