Rural Metro Corporation (NDAQ:RURL) executives and board members may finally face their day of reckoning after a large shareholder expressed dissatisfaction with the medical transportation company's late SEC filings, inadequate investor relations and the unreasonable delay of the annual meeting, according to a Schedule 13D filing with the SEC.

Stadium Capital, which owns 11.4 percent of the company, changed their filing status from passive to active yesterday and urged members of the board to restore shareholder confidence by addressing its concerns, replacing management or pursuing a sale of the company.

"Our primary research continues to suggest that RURL has strong relationships in the communities in which it operates and highly regarded field personnel," said the hedge fund in its letter to the board. "We believe that there is value well in excess of the current share price, but repeated financial reporting, operational and communication blunders have both masked and potentially eroded this value."

The hedge funds primary concerns are with the confusion and frustration caused by RURL's repeated delays and restatements (see 10-KNT filing) along with weak financial performance arising from mismanagement of uncompensated care. The company also shocked shareholders when it announced in a Schedule 14A filing that it would delay its 2007 annual meeting until February 2008!

Stadium Capital wants to address these issues sooner, "We see no reason to wait until February 28, 2008 to have the 2007 Annual Meeting of Stockholders. You and we know that there are significant issues that need to be discussed and we would prefer to get that done as soon as possible."

In the end, there are clearly problems with RURL that need to be addressed and it will be interesting to see how the company responds to these requests. Stadium's large stake in the company should at least warrant a response, which makes RURL a stock worth watching!

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