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Originally published Thursday, October 19, 2006 at 12:00 AM

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Hedge fund won't have anyone on Cutter board

Pirate Capital owns a big piece of Cutter & Buck, but the troubled Connecticut-based hedge fund won't have a representative on Cutter's...

Seattle Times business reporter

Pirate Capital owns a big piece of Cutter & Buck, but the troubled Connecticut-based hedge fund won't have a representative on Cutter's board anytime soon.

Pirate, an activist hedge fund that owns more than 13 percent of the Seattle-based sportswear company's outstanding stock, had nominated David Lorber, one of its analysts, to sit on Cutter's board. Lorber was one of eight board nominees scheduled to be voted on today at Cutter's annual meeting.

But late last month, Lorber and four other members of Pirate's 10-person investment team resigned from the firm. In a filing Wednesday with the Securities and Exchange Commission (SEC), Cutter said Lorber had withdrawn his candidacy and that the company would go ahead with seven directors.

Pirate, which manages $1.7 billion in assets, has struggled with below-average returns this year. The firm's founder, Thomas Hudson, said in a letter to investors that he would refocus Pirate on boosting returns rather than raising more money.

In addition, the SEC reportedly is investigating the firm for not reporting some of its stock sales in a timely fashion.

Pirate owns sizable stakes in more than two dozen companies, including Eugene, Ore.-based PW Eagle, a maker of plastic pipe.

Like other activist hedge funds, it concentrates on investing in what it considers underperforming companies and then demanding changes from management.

Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com

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