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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.



Forum reference:

Activist initiates proxy contest based on views defined in shareholder survey


The article below from The Deal, which has been a private subscription service of Euromoney Institutional Investor PLC since the beginning of 2019, is provided to Forum participants with permission of the editor.

For the publisher's referenced previous report of likely activist attention to the company, and for the survey report on which the analysis was based, see

For the dissident shareholder's report of recently purchased HC2 shares and intent to replace management, see


Source: The Deal, January 28, 2020 article


Ronald Orol, Senior Editor


Ex-Third Point Analyst Eyes Director Fight at Falcone’s Firm

The Philip Falcone holding company becomes a “direct hit” after joining The Deal’s watchlist of possible activist candidates in October.

By Ronald Orol

Updated on January 28, 2020, 05:54 PM ET


HC2 Holdings chairman and CEO Philip Falcone


Michael Gorzynski, an ex-analyst at Dan Loeb’s activist fund Third Point LLC, plans to run a slate of director candidates for the board of Philip Falcone’s investment vehicle HC2 Holdings Inc. (HCHC).

The activist investor on Monday, Jan. 27, reported owning 5% of HC2's shares in a securities filing that included a scathing letter to the company's board. Gorzynski raised concerns about the holding company’s share price performance, debt load, corporate expenses and related party transactions.

The note concluded that "management is unsuited to continue to manage a public company," a comment suggesting that Gorzynski may be seeking to oust Falcone with his contest. If so, he may consider a change-of-control director fight at HC2 by a mid-February board nomination deadline.

"Management’s unsuitability, consistent underperformance and self-dealing patently disqualify them from continuing to manage the company," Gorzynski said in the filing.

New York-based HC2 comes off The Deal’s watchlist of potential activist campaigns and joins its "Direct Hits" list of companies targeted by insurgents. The Deal in October suggested that HC2 could be targeted by an activist hedge funds after the Shareholder Forum, a New York-based research firm, disclosed the results of a survey commissioned by two undisclosed HC2 investors.

The study found that only 24% of polled HC2 investors had confidence in the current board and executives while 68% of shareholders supported adding at least some new directors to HC2’s five-person board. Respondents to the survey who owned more than 100,000 shares showed a much stronger two-thirds level of support for replacing all or most of the board. Also, 48% of those polled said it would be “effective” for HC2 to sell some or all of its existing subsidiaries to reduce debt.

Gorzynski has never run a proxy contest on his own before, but he likely gained valuable experience on the process between 2006 and 2011 when he worked as an analyst at Third Point. Loeb's Third Point has launched eight proxy fights in its history, of which six occurred between 2006 and 2011, and threatened proxy contests at seven other companies. 

The Deal has learned that Gorzynski is running his own capital for the insurgency. He accumulated roughly 2.3 million shares, roughly $5 million worth, for the campaign, according to securities filings. Gorzynski reported accumulating the position in a 13D filing along with funds MG Capital Management Ltd., Rio Royal LLC and Percy Rockdale LLC.

It is unclear if Gorzynski is interested in driving HC2 to make further divestitures. HC2 owns majority stakes in steel construction firm DBM Global Inc., submarine communications cables services provider Global Marine Group and insurance company Continental LTC Inc.

HC2 appears to be nearing an exit of its Global Marine Group unit. In October, HC2’s Marine Services Segment, Global Marine Group, agreed to sell its stake in Huawei Marine Networks and its 49% joint venture with Huawei Technologies Co. Ltd., to Hengtong Optic-Electric Co., a deal that is expected to close in the first quarter of 2020. 

B. Riley analyst Sarkis Sherbetchyan noted in a November report that HC2’s management affirmed a “more robust sales process” for its Global Marine unit after taking steps to separate its joint venture with Huawei. 

"Over the past month, the company has received multiple preliminary bids from high-quality acquirers," Sherbetchyan said. “Should [HC2] successfully sell the marine services segment, proceeds should be used to reduce debt at the HoldCo. level."

An HC2 spokesman said in October that a sale of Global Marine is "clearly" a top priority and the company continues to pursue multiple paths to maximize the value of the unit through a very “active and ongoing” process, the spokesman said.

Falcone, a hedge fund billionaire, was charged in 2012 by the Securities and Exchange Commission with fraud. The SEC alleged that Falcone was guilty of manipulating bond prices and misappropriating client assets, market manipulation and betraying clients.

In his letter, Gorzynski notes that Falcone is prohibited from day-to-day operation of Continental General, the company’s insurance subsidiary. 

"How can the board continue to support a management team that is banned from managing the issuer’s largest business?" Gorzynski asked.

An HC2 spokesman did not return a request for comment on the matter Tuesday.

Kleinberg, Kaplan, Wolff & Cohen PC partners Christopher Davis, Rebecca Van Derlaske are advising Gorzynski on his campaign. 



© 2020 The Deal.




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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