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Michelle
Celarier |
PREMIUM
Phil Falcone Out as HC2 CEO
The company’s new board ousted the controversial former hedge
fund manager.
June 11, 2020 |
Phil Falcone (Christopher Goodney/Bloomberg) |
Phil Falcone, the former billionaire
hedge fund manager who had been running HC2 Holdings after being
ousted from the hedge fund world by the Securities and Exchange
Commission years ago, has lost his job.
The newly-constituted board of HC2 said
Wednesday that it has appointed Wayne Barr Jr. as interim CEO,
succeeding Falcone “effective immediately.”
Falcone declined to comment.
For most of this year,
Falcone had faced an activist attack
from MG Holdings, run by Michael Gorzynski, that sought to replace the
entire board and oust Falcone.
When the battle was
settled last month, Falcone kept his job
and his board seat, and the activists only gained two seats on the
board. But other newcomers, including Chairman Avie Glazer, also
sought a change in management.
The removal of Falcone was one of the
new board’s first actions.
“The Board of Directors intends to
commence a search for a permanent CEO and has formed a search
committee comprised of Chairman Avie Glazer, and directors Warren
Gfeller and Michael Gorzynski,” the statement read.
As the activist battle had intensified
this spring, Falcone had taken several steps to try to
preserve his job.
He had relinquished the chairman title, nominating Glazer — a new
shareholder — for that job. He also agreed to forgo his bonus.
The settlement with the activists did
not give them a majority presence on the board, and it did not kick
Falcone off the board. But the new directors, including Glazer, ended
up agreeing that Falcone had to go.
As Institutional Investor reported
earlier, Falcone has been enmeshed in numerous legal battles with
creditors, and has more than $80 million in outstanding claims that he
has refused to pay.
The new interim CEO has a long history
with HC2. “With Wayne’s extensive financial and strategic experience,
his familiarity with HC2 since its inception, along with the incumbent
HC2 team that has been effectively executing on transforming our
business, we are confident that he will skillfully guide HC2 through
this next phase and create value for our stockholders,” Glazer said in
the statement.
He also threw a bone to Falcone. “At the
same time, we also want to thank Phil for his contributions to HC2.
Phil helped build HC2 over the past six years, acquiring undervalued
assets and growing them under the HC2 umbrella. He has set the stage
for HC2 to succeed in its next chapter. We wish him all the best in
his future endeavors.”
HC2’s stock — which fell 10 percent the
day of the settlement that allowed Falcone to keep his job — fell
nearly 16 percent on the news he was out as CEO, on a day when the S&P
500 Stock Index fell nearly 6 percent.
Falcone, who previously told II that he
owned between 3 and 5 percent of HC2’s outstanding shares, did not
respond to a query as to whether he was selling his stake.
© 2020
Institutional Investor LLC.
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