Ex-C.E.O. Gives Self a Red Light

In another twist to the convoluted corporate tale of Nestor Inc., erstwhile employee William B. Danzell says he is abandoning his proxy fight against directors of the red light traffic enforcement device company.

Danzell said that he was throwing in the towel after his efforts to control the company were rebuffed by Nestor's board, which includes a former Wall Street luminary George L. Ball, who was president of E.F. Hutton Group and chairman of the board of Prudential-Bache Securities.

"If they are able to fight me," said Danzell, who heads Silver Star Partners, a Hilton Head, South Carolina, investment firm, "they certainly are able to fight to get more customers."

Danzell, who served as C.E.O. from January 2003 to May 2007, got in a tug of war with the board over control of the $50 million company, which installs and monitors the traffic light control devices. It has more than 30 cities as customers, the biggest of which is Los Angeles.

After he was shown the door of the executive suite, Danzell tried to regain control through the board--while, at the same time, still being an employee of the company. He was then terminated as an employee, too--a fact, he said, he discovered last week when his company health insurance wasn't accepted as payment for his children's pre-school physicals--without any notice.

His termination as C.E.O. came after he bought additional shares to bolster his control of the company, but then decided they were purchases that violated the firm's code of ethics for its employees.

Danzell said that he is canvassing his investment partners, but probably will cease his efforts to control the company and, for now at least, monitor its progress. Another option is to sell the shares. Since a recent capital infusion, he and his investors now own about 35 percent of the company. They are still the biggest shareholders.

Ball, chairman of the board of SMH Capital, a Houston, Texas, investment banking group, did not return calls for comment.

by Elizabeth Olson