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The Shareholder Forumtm

support for fair value realization

of stock investments in

DBM Global Incorporated

(f/k/a Schuff International Inc.)



Support of Minority Shareholder Interests

The Shareholder Forum had offered to support Appraised Value Rights ("AVR") of DBM (f/k/a Schuff International) minority shareholders in 2014 following a $31.50 per share tender offer by the company's controlling shareholder, HC2 Holdings, Inc., with the stated intent to proceed with a short-form merger "as soon as practicable.”

HC2 acquired DBM shares in the 2014 tender offer and other purchases bringing its total holdings to 92% of outstanding DBM shares, but has not proceeded with a merger. The Forum has continued to support the minority shareholder interests of its AVR participants in this context.



Participant distribution:

Legal journal's report of efforts to assure respect of company's minority shareholder interests


For a copy of the complaint reported in the article below, see


Source:  Law360, September 14, 2018 article

Investor Seeks DBM Records To Probe Possible Misconduct

By Rose Krebs

Law360 (September 14, 2018, 5:15 PM EDT) -- An investor group asked the Delaware Chancery Court on Thursday for access to construction company DBM Global Inc.'s book and records to investigate possible wrongdoing involving a controlling stockholder, including claims the stockholder borrowed funds for its sole benefit.

Shareholder Fair Value Investments Inc. filed a complaint under Section 220 of Delaware Corporation Law seeking access to the records to investigate possible mismanagement and breaches of fiduciary duty by the company's officers relating to financial dealings with controlling stockholder HC2 Holdings Inc.

"There is a more than credible basis to infer that the directors of DBM engaged in possible mismanagement or wrongdoing and/or that they breached their fiduciary duties by permitting misconduct by DBM's controlling stockholder to persist," the complaint said.

HC2, which owns 90 percent of the company's stock and has been controlling stockholder since 2014, has utilized its position to "unilaterally" elect all board members and act as if it owns 100 percent of the company without regard to the rights of minority shareholders, the complaints contends.

HC2 has borrowed funds using the "financial strength of DBM" for its sole benefit, the complaint contends. An indenture HC2 entered into in 2014 with U.S. Bank NA includes restrictions on DBM that have impacted the company's ability to borrow for its own business opportunities, the shareholder claims.

"HC2 has also announced its intention to refinance its existing debt and presumably will continue to use restrictions on DBM's finances to support that refinancing," the complaint asserts.

DBM has failed to provide financial statements necessary to determine if officers violated their fiduciary duty in connection with the indenture and whether it violates Delaware Corporation Law limiting such arrangements to subsidiaries completely owned by a parent company, the complaint said.

The shareholder also called into question a tax sharing agreement between HC2 and DBM, contending information about the pact has not been provided such as how much DBM might be saving in taxes.

Information about millions of dollars in cash advancements DBM made to HC2 since 2016 has also not been provided in financial statements or whether the company was reasonably compensated, including interest, for the transactions, the complaint contends.

The investor group also claims HC2 employees who sit on the board may have engaged in a scheme this year to avoid a stockholder meeting in which questions about the indenture and advancement of funds would be raised.

In an Aug. 27 letter to the company’s general counsel, Fair Value Investments Chairman Gary Lutin said the refusal previously to provide some records led to the filing to determine if action should be taken to recover damages if the officers did not perform their duties.

Under Delaware law, investors can have the Chancery Court compel a company to release its books and records for inspection if the shareholder can show a "proper purpose," such as investigating wrongdoing.

Arizona-based DBM Global provides construction services to a portfolio of companies that includes Schuff Steel Co., a steel fabrication and erection company, according to its website.

Representatives for DBM and the shareholder's counsel were not immediately available for comment Friday.

Counsel information for DBM Global Inc. was not immediately available.

Fair Value Investments Inc. is represented by Edward M. McNally and Kathleen A. Murphy of Morris James LLP.

The case is Fair Value Investments Inc. v. DBM Global Inc., case number 2018-0677, in the Court of Chancery of the State of Delaware.

--Editing by Katherine Rautenberg.


© 2018, Portfolio Media, Inc.



The project supporting investor interests in DBM Global Incorporated (f/k/a Schuff International, Inc.) is being conducted by the Shareholder Forum for the benefit of Participants that have reserved Appraised Value Rights ("AVR") Management, subject to conditions including standard Forum policies that each Participant is expected to make independent use of information obtained through the Forum and that participation is considered private unless the Participant specifically authorizes identification.

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