Bay Harbour, Penn Traffic Spar Over Board Seat

ELLIOT ZWIEBACH

SYRACUSE, N.Y. — Penn Traffic Co. here said Monday it has offered Bay Harbour Management, which owns 23% of its shares, a seat on the board of directors, but only if the investment group signs a confidentiality agreement. "Thus far, Bay Harbour has declined to enter into such an agreement," Penn Traffic said in a press release. "The Penn Traffic board believes that providing Bay Harbour with access to the company's confidential information without restricting the actions that Bay Harbour may take once it receives such information, would not be in the best interest of all of Penn Traffic's stockholders." Penn Traffic said Bob Kelley, chairman, had invited a representative of Bay Harbour to serve on the board, in a letter dated April 23 that stipulated it must first sign a confidentiality agreement. However, in an amended Schedule 13D filed by Bay Harbour May 4, the company said it had suggested a designee of Bay Harbour be appointed to the board, "which [Penn Traffic] has refused to do on terms satisfactory to" Bay Harbour.