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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 distribution:

Competing demands for CEO's attention (and cash)


For records of the court proceeding reported in the article below, see

For other recent court proceedings addressing similar interests, see


Source: Financial Times, March 9, 2020 article



Hedge funds

NY judge freezes hedge fund manager Philip Falcone’s assets

Decision follows failure to pay millions in legal fees in fight with regulators


A judge has upheld a decision by an arbitrator earlier in which Mr Falcone and Harbinger were ordered to pay $13.6m in legal fees to Dontzin Nagy & Fleissig © Christopher Goodney/Bloomberg

Ortenca Aliaj in London  MARCH 9, 2020

A New York judge has frozen assets belonging to hedge fund manager Philip Falcone and his Harbinger Offshore fund after he failed to pay millions in legal fees to a Manhattan law firm that defended him in high-stakes litigation against US regulators.

Judge Arthur Engoron ordered the freeze last week following recent allegations that Mr Falcone, who had an estimated net worth of $1bn in 2014, has reneged on his debts and sold some of the underlying collateral, which included famous art works by artists such as Pablo Picasso and Andy Warhol.

In his ruling, Judge Engoron upheld a decision handed down by an arbitrator earlier this year in which Mr Falcone and Harbinger were ordered to pay $13.6m in legal fees to Dontzin Nagy & Fleissig for work going back almost eight years.

The New York-based law firm represented Mr Falcone in a 2013 settlement with the Securities and Exchange Commission over allegations that the investor had borrowed

$113m from his hedge fund to pay his personal taxes and had secretly favoured certain clients when it came to redemption requests.

Under the settlement, Mr Falcone and Harbinger admitted to “multiple acts of misconduct” that hurt investors and interfered with the normal functioning of the securities markets. The investor and his hedge fund were ordered to pay $18m in fines.

In a document made public as evidence in court, arbitrator Caroline Antonacci said DNF had negotiated a settlement with the SEC which was “highly lucrative” for Mr Falcone as it allowed him “to continue to oversee his substantial LightSquared investment, remain CEO of a public company, manage his hedge fund, and immediately resume earning enormous sums”.

Mr Falcone was surprised at the result, a person familiar with the situation said.

DNF later also agreed a settlement with the New York attorney-general on behalf of Harbinger for tax evasion, in which the company was forced to pay $30m in fines. Harbert Management Corporation, the Alabama-based investment management company that sponsored Mr Falcone’s hedge fund, received a $40m fine.

Arbitration documents show that DNF provided legal services to Mr Falcone and his firm for six years in various capacities. DNF lawyers negotiated a termination agreement for Mr Falcone’s general counsel, Robin Roger, who resigned after the investor allegedly failed to pay her millions of dollars in compensation, and a dispute involving the investor’s interest in Minnesota Wild, a National Hockey League team.

As lawyers’ bills piled up, Mr Falcone told DNF that he was having “liquidity” issues and that he was “trying everything under the sun” to resolve them, according to the arbitration documents.

In a stark reversal of fortune, Mr Falcone has been left nursing heavy debts and in 2019 sold his New York townhouse for a record $77m.

Mr Falcone, chief executive of HC2, has also found himself in the crosshairs of activist investor MG Capital. The firm has flagged concerns over the ex-hedge fund manager’s regulatory issues and is pushing to oust Mr Falcone from the company’s board.

“We are concerned about the appropriateness and legitimacy of the services that HC2 may be receiving from Mr Falcone and his affiliates, especially given past infractions,”

the firm wrote in a letter to shareholders last month.

“Mr Falcone and the incumbent board have taken another series of brazen steps to entrench themselves at the expense of independent stockholders and corporate democracy,” it added.

In arbitration, Mr Falcone accused DNF of malpractice and argued that the firm’s fees were “excessive” and “unreasonable”. Those allegations were dismissed by the arbitrator.

Harbinger declined to comment.


Copyright The Financial Times Limited 2020.




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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