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 Post subject: LCA Vision's CEO canned after buying TLC stock
PostPosted: Sat Apr 15, 2006 4:24 am 
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In the month before stepping down as chief executive of LCA-Vision Inc., Stephen N. Joffe spent millions of dollars to buy shares in a rival operator of laser eye-surgery clinics.

That investment cost him more than the money involved -- it led to his replacement as chairman of LCA-Vision.

Investors who acquire more than 5% of a company's shares must report that holding to the Securities and Exchange Commission. On March 3, two days after Dr. Joffe's son took over as interim chief executive, Dr. Joffe disclosed in an SEC filing that he and his foundation had amassed a 7.7% stake in TLC Vision Corp., acquiring the majority of those shares in the prior month for $26.7 million.

The son, interim Chief Executive Craig P.R. Joffe, said he had no knowledge of his father's investment in Ontario's TLC Vision until after the SEC filing was made. Craig Joffe said his reaction was "multifaceted" when he learned of his father's investment. "Surprised is definitely a fair characterization for me as well," he said.

Asked whether the disclosure had affected his relationship with his father, Craig Joffe said, "Yes" but declined to elaborate.

LCA-Vision spokeswoman Patricia Forsythe said LCA-Vision shareholders were surprised too, and the board removed Stephen Joffe as chairman because of the investment.

"We just thought [it was] in the best interest of shareholders that he be removed from the chairman position," she said, "since...obviously a number of our largest shareholders had contacted us, you know, questioning."

Ms. Forsythe said Stephen Joffe's departure as chief executive reflected the Cincinnati company's desire to separate the chief executive and chairman roles as well as Dr. Joffe's desire "to do other things." Craig Joffe characterized it as a "mutual decision" between the board of directors and his father.

Stephen Joffe, 63 years old, had been less involved in daily operations lately, Ms. Forsythe added. Even after Stephen Joffe disclosed his TLC Vision stake and lost his title as chairman, Ms. Forsythe said, there was no animosity, and all members of management "still talk to Steve."

"Steve has emphasized to us -- the employees -- that he wouldn't do anything to harm the company," she said.

Stephen Joffe, who founded LCA-Vision, remains a member of the company's board. Asked whether his father will remain on the board, Craig Joffe said, "That is an issue that is being discussed between him and the board of directors of the company."

Stephen Joffe's lawyer, Art Gormley, said, "It's an interesting situation, I'll give you that," but Mr. Gormley said he and his client would have no further comment.

Stephen Joffe said in his SEC filing that he had bought the TLC Vision shares because they represented "an attractive investment opportunity." TLC Vision spokeswoman Anna Austin said: "Certainly the TLC management and board would agree with that." She said, however, that company officials haven't spoken with Stephen Joffe.

Maxim Group analyst Anthony Vendetti said he was "definitely surprised" that Stephen Joffe would invest in a competitor. "I can tell you every investor I talked to saw a problem with it," he said.

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