Thursday, July 2, 2015

Hill International's CEO, president sell shares to meet margin call

The two top executives had personal loans backed by some of their holdings in the Marlton project management firm. Combined, they sold more than 2 million shares recently.

Hill International's CEO, president sell shares to meet margin call

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Unfortunately for the top management of Hill International Inc., the national “do-not-call” list doesn’t prevent margin calls.

The Marlton project management firm said this week that CEO Irvin E. Richter and president David L. Richter had sold about two million shares in response to margin calls.

The company, which employs 2,100 people in more than 30 countries, said the Richters had personal loans backed by some of their shares in Hill International.

Typically in a margin account, an investor can borrow against the value of the stock he owns. If the securities fall to a certain level, the broker makes a margin call, requiring the investor to add more cash to the account or sell some stock.

During a Nov. 6 conference call, Arnold Ursaner of CJS Securities Inc. asked David Richter about the likelihood of a margin call.

“We both put the margin loans in place very conservatively, or so it seemed six months ago,” Richter said in response. Hill shares then traded in the $14 to $15 range.

Richter told the analysts that he expected he and his father would sell some shares to address the loans.

According to a filing with the Securities and Exchange Commission, David Richter sold 48,140 shares at $3.50 each on Nov. 21 and 550,000 shares at $3.30 the following Monday.

His father sold 1.45 million shares at $3.30 on Nov. 24, according to a separate filing.

Combined, they sold $6.77 million worth of Hill International common shares to meet their margin calls.

To reduce the chance that they might get another such call, the Richters also entered in a long-term refinancing of other personal loans, the company said.

“We have worked extremely hard over the past few weeks to minimize any involuntary sales of our significant equity holdings in Hill at the current depressed levels,” Irvin Richter said in a statement.

He still owns 8,732,305 shares of Hill International, worth about $49 million based on Wednesday’s closing price of $5.63. David Richter owns 3,865,313 shares, worth nearly $22 million.

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