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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.



Forum reference:

Settlement of HC2 contest negotiated by shareholders seeking orderly transition


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 referenced press release and subsequent SEC report of the standstill agreement accommodating the challenger and two other shareholder interests seeking to avoid disruption, see


Source: The Deal, May 14, 2020 article


Ronald Orol, Senior Editor


Falcone Remains HC2 CEO After Gorzynski Settlement

The founder and CEO of the miniconglomerate keeps his top spot at the company but concedes two board positions as part of a settlement with activist Michael Gorzynski.

By Ronald Orol

Updated on May 14, 2020, 10:53 AM ET

Philip Falcone, HC2 CEO


Ex-Third Point LLC analyst Michael Gorzynski on Thursday, May 14, settled his change-of-control director contest with HC2 Holdings Inc. (HCHC) in a deal that allows the miniconglomerate's founder Philip Falcone to keep his CEO position and while adding two dissident directors to the board.

The agreement, which was struck shortly after the deadline for votes in the director battle, installs Gorzynski and fellow dissident, Kenneth Courtis, a former Goldman, Sachs & Co. vice chairman, onto HC2’s board.

In addition, two new candidates nominated previously by HC2, Avram Glazer and Shelly Lombard, will receive director positions in a settlement that expands the board initially from six to ten members. At HC2’s annual meeting, scheduled for July 8, the board will drop down to seven members as three Falcone-backed incumbent directors step down.

The agreement ends one of the most heated director fights of 2020 and one that came with many twists and turns along the way. 

It sets up a divided board, as directors likely have different goals for the company’s assets. Falcone and Gorzynski are seemingly at odds over M&A options for HC2's assets, once markets stabilize. The dissident, who runs MG Capital, wants HC2 to keep its core assets, DBM Global, Continental General Insurance and American Natural Gas, while divesting other units and stakes.

Gorzynski  may try to push the board into taking a deep dive into Falcone’s oversight of the company, considering that proxy advisers Institutional Shareholder Services and Glass Lewis expressed concerns in recent reports about his oversight at the company. Glass Lewis had written that the dissident “highlighted valid concerns” about Falcone’s personal legal matters “in the context of potential reputational harm to certain of the company’s operating businesses…” ISS pointed to “refinancing missteps, questionable accounting decisions and Falcone's prior litigious history” as reasons to remove him from the board.

Gorzynski, who had sought to become HC2’s interim CEO, nominated his candidates through a rarely employed written consent solicitation. The consent solicitation contest, which did not require an annual meeting to conclude, comes with rules that make it much harder to get directors elected. 

During a consent solicitation, a campaign must get the backing of a majority of outstanding shares to get directors elected rather than the much lower threshold of a majority of voting shares required at an annual meeting. It's possible that Gorzynski did not obtain the support of a majority of outstanding shares needed to win. However, it is likely that he would have fared better with a follow-up contest at the company’s annual meeting had he followed up a loss in this effort with a secondary fight. The possibility of a Gorzynski win at the company’s annual meeting likely acted as leverage in negotiations.

Some board changes made by HC2 in advance of the fight paid off in terms of helping to preserve Falcone’s position. HC2 announced May 4 that it was adding Lombard, an independent consultant, and Jeffrey Tudor, founder of Tremson Capital Management LLC, to its board. However, in the final agreement with MG Capital, Lombard made it to the board and Tudor was excluded.

In addition, In April, HC2 made a strategic move in defense of Falcone, by announcing it was installing Lancer Capital LLC’s Glazer, a 5.3% holder, as board chairman. Glazer was installed as an independent director but has many connections to incumbent director Warren Gfeller, CEO Falcone and HC2 that suggest he isn’t independent.

HC2 retained Jefferies LLC for financial advice on the agreement. Jefferies, which is HC2’s largest shareholder with a 7.6% stake, also provided advice on HC2’s strategic options for its steel construction unit, DBM Global Inc.

Skadden, Arps, Slate, Meagher & Flom LLP partner Richard Grossman provided legal advice to HC2.

Kleinberg, Kaplan, Wolff & Cohen PC partner Christopher Davis and associate Rebecca Van Derlaske provided legal advice to MG Capital.



© 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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