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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 distribution:

Support of HC2's argued inability to directly fund defendants' settlement of DBM shareholder claims

 

For the complaint filed in the case reported below to enforce obligations of HC2's chief executive and his controlled affiliates, including the Global Opportunities Breakaway MM LLC fund that was reported to own 540,000 of the total 1,817,711 issued HC2 shares (3.96% of total voting rights) that Mr. Falcone stated he controlled in his February 14, 2019 SEC Schedule 13D/A25, see

For other recent actions to enforce obligations of HC2's chief executive officer and his affiliated companies, see

For an example of HC2 references to restrictions on the use of its assets as an argument for using DBM assets to settle claims of DBM shareholders against HC2 and its affiliated defendants, see page 14 (PDF p. 20) of the February 3, 2020, HC2 Defendants' Brief in Support of the Settlement and in Opposition to the Objections.

 

Source: Reuters, February 21, 2020 article

 

 

 BUSINESS NEWS        FEBRUARY 21, 2020 / 2:31 PM

 

Lawsuit in NY says ex-hedge fund manager Falcone reneged on loans, wrongly sold a Warhol

Jonathan Stempel

NEW YORK (Reuters) - Former hedge fund manager Philip Falcone has been sued for more than $65.8 million after he allegedly defaulted on a series of loans and improperly sold some of the underlying collateral, including an Andy Warhol painting.

FILE PHOTO: Philip Falcone, chief executive officer and chief investment officer for Harbinger Capital Partners, participates in a panel discussion during the Skybridge Alternatives (SALT) Conference in Las Vegas, Nevada May, 9, 2012. REUTERS/Steve Marcus

In papers filed on Friday with the New York State Supreme Court in Manhattan, Melody Business Finance LLC said Falcone and several business affiliates have reneged on their obligations to repay the loans, which date from 2013 to 2017.

Melody said Falcone has cited obligations to other creditors, including New York’s attorney general and New York City, for his inability to repay the loans or turn over the collateral, which also includes millions of dollars in jewelry.

Falcone previously ran Harbinger Capital Partners, which once oversaw $26 billion of assets.

He is now chief executive of New York-based HC2 Holdings Inc, which has businesses in construction, marine services and several other sectors. HC2 is not a defendant.

Alex Spiro, a partner at Quinn Emanuel Urquhart & Sullivan representing Falcone, said in an statement: “This is a personal dispute without merit. We will fight this.”

According to court papers, the pledged collateral also included works by Edgar Degas, Claude Monet, Pablo Picasso and Camille Pissarro, as well as several Warhols.

Melody said Falcone mentioned last fall that he sold a Warhol and a painting by Japan’s Yayoi Kusama that were among the collateral at Christie’s.

In April 2017, Alabama-based Harbert Management Corp, which had sponsored Harbinger, reached a $40 million settlement with the New York attorney general’s office for nonpayment of taxes.

Then in September 2018, an offshore hedge fund firm once led by Falcone agreed to pay $30 million to resolve New York state and city tax claims.
Falcone agreed in 2013 to a five-year industry ban related to Harbinger, including for favoring some investors over others and borrowing $113 million to pay personal taxes.

The case is Melody Business Finance LLC v Falcone et al, New York State Supreme Court, New York County, No. 651155/2020.

Reporting by Jonathan Stempel in New York; Editing by Richard Chang

 

© 2020 Reuters.

 

 

 

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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