Ceridian Sacks Division Chief

Ceridian shares were recently off 25 cents to $33.98.

A Ceridian spokesperson refused to say exactly what information Krow gave to Pershing. But according to a legal brief filed by Pershing, Krow told Ackman and other Pershing representatives that he wouldn't run for re-election to Ceridian's board because he disagreed with management's plans to hold on to Comdata and pursue other acquisitions.

Krow also named other large shareholders who would support attempts to spin off Comdata and vote for an alternative set of directors nominated by Pershing, according to the brief.

What's more, the brief states that Krow told Ackman that he and Ceridian's chief financial officer, Douglas Neve, had written letters to the board last year criticizing the company's "business plans and strategies," and describing "mismanagement by Ceridian's former CEO Ron Turner." The letters also describe "concerns with accounting problems that eventually led to SEC investigations," and "failure of the board to oversee management."

Documents suggesting that the board failed to correct mismanagement by the former CEO could support Pershing's campaign to elect its own slate of directors.

Ceridian replaced Neve in March.

Following the initial meeting with Krow, Pershing filed with Securities and Exchange Commission as an "active investor" in Ceridian and told the company that it planned to submit its own slate of directors. One month later, Ceridian requested copies of the letters sent by Krow and Neve, but the company refused to hand them over.

Krow has subsequently denied telling Ackman about the letters. He also never provided copies of them to Pershing, "although he undoubtedly possesses access to them as an author," wrote Judge Chandler in his ruling on Friday.

In a subsequent press release Monday, Pershing said it is "disappointed but not surprised" that Ceridian fired Krow. Pershing also reasserted its belief that "Messrs. Krow and Neve were acting in the best interest of Ceridian and its shareholders" when they wrote letters criticizing management.

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