MG Capital Questions HC2’s Appointment of Long-Time Falcone Insider as Chairman
03 April 2020 - 7:00AM
Business Wire
MG Capital Management, Ltd. (together with Percy Rockdale LLC,
the nominating stockholder, and its affiliates, “MG Capital” or
“we”), a significant stockholder of HC2 Holdings, Inc. (NYSE: HCHC)
(“HC2” or the “Company”), which collectively with the other
participants in its solicitation beneficially owns more than 5% of
the Company’s outstanding shares, today issued the below statement
regarding HC2’s announced separation of its Chairman and Chief
Executive Officer roles. As a reminder, we invite stockholders to
learn more about our case for change and sign up for updates at
www.ABetterHC2.com.
Michael Gorzynski, Founder and Managing Partner, commented:
“We believe stockholders should be very concerned by the
elevation of Warren Gfeller to the role of interim Non-Executive
Chairman at HC2. Mr. Gfeller is a long-time HC2 director and has
longstanding ties to Philip Falcone that date back many years. He
most recently served as Chairperson of the Company’s Audit
Committee, which oversaw a series of potential material
misstatements and omissions as well as a questionable bargain
purchase gain that we are concerned may have resulted in an
increase in management compensation at the expense of stockholders.
Mr. Gfeller has done nothing to lessen those concerns in the last
month.
After MG Capital sent a detailed, substantiated letter to Mr.
Gfeller on March 2 to request that he address these serious
accounting and disclosure issues, his immediate response was to
send our correspondence to Mr. Falcone, who was the very person who
may have personally benefited at stockholders’ expense. We contend
that the elevation of Mr. Gfeller—whose troubling response to our
letter fails to give us confidence in his independence and
competence—only solidifies the need for wholesale change atop the
Company. We believe that this shuffling of the directors’ deck
chairs is a reactionary maneuver that stockholders will surely take
note of and question.
HC2 should refrain from further maneuvers that we believe are
clearly designed to insulate Mr. Falcone and position him to
continue to exert control over his fellow directors while still
sitting on the Board of Directors.”
CERTAIN INFORMATION CONCERNING THE
PARTICIPANTS
MG Capital Management, Ltd. together with the other participants
named herein (collectively, “MG Capital”), has filed a preliminary
consent statement and an accompanying consent card with the
Securities and Exchange Commission (“SEC”) to be used to solicit
votes for the election of its slate of director nominees for the
Board of Directors of HC2 Holdings, Inc., a Delaware corporation
("HC2" or the “Company”).
MG CAPITAL STRONGLY ADVISES ALL SHAREHOLDERS OF THE COMPANY TO
READ THE CONSENT STATEMENT AND OTHER CONSENT MATERIALS AS THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
SUCH CONSENT MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S
WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN
THIS CONSENT SOLICITATION WILL PROVIDE COPIES OF THE CONSENT
STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS’
PROXY SOLICITOR: SARATOGA PROXY CONSULTING LLC (TEL: (888) 368-0379
OR (212) 257-1311; EMAIL: INFO@SARATOGAPROXY.COM).
The participants in the solicitation are anticipated to be MG
Capital Management, Ltd., a Cayman Islands company limited by
shares (“MG Capital”), Percy Rockdale LLC, a Michigan limited
liability company (“Percy Rockdale”), Rio Royal LLC, a Delaware
limited liability company (“Rio Royal”), Michael Gorzynski, a
natural person, (“Mr. Gorzynski,” and, together with MG Capital,
Percy Rockdale and Rio Royal, the “MG Capital Participants”),
George Brokaw, a natural person (“Mr. Brokaw”), Kenneth Courtis, a
natural person (“Mr. Courtis”), Robin Greenwood, a natural person
(“Mr. Greenwood”), Liesl Hickey, a natural person (“Ms. Hickey”),
and Jay Newman, a natural person (“Mr. Newman” and together with
Mr. Brokaw, Mr. Courtis, Mr. Greenwood, Mr. Gorzynski and Ms.
Hickey, each a “Nominee” and collectively, the “Nominees”; the
Nominees and the MG Capital Participants collectively, the
“Participants”).
As of the date hereof, Percy Rockdale is the direct owner of
2,422,000 shares of common stock of the Company, $0.001 par value
(“Common Stock”). As of the date hereof, Rio Royal is the direct
owner of 10,000 shares of Common Stock. MG Capital Management,
Ltd., as the investment holding company of Rio Royal, may be deemed
the beneficial owner of the 10,000 shares of Common Stock owned by
Rio Royal. Mr. Gorzynski, as the sole Manager of Percy Capital and
the sole Director of MG Capital Management, Ltd., may be deemed the
beneficial owner of (i) the 2,422,000 shares of Common Stock owned
by Percy Rockdale and (ii) the 10,000 shares of Common Stock owned
by Rio Royal. As of the date hereof, Mr. Brokaw is the beneficial
owner of 40,000 shares of Common Stock. As of the date hereof, Mr.
Courtis is the beneficial owner of 237,336 shares of Common Stock.
Except as described herein, no other Participant beneficially owns
any Common Stock as of the date hereof.
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version on businesswire.com: https://www.businesswire.com/news/home/20200402005789/en/
For Investors: Saratoga Proxy Consulting LLC John Ferguson / Joe
Mills, 212-257-1311 jferguson@saratogaproxy.com /
jmills@saratogaproxy.com For Media: Profile Greg Marose / Charlotte
Kiaie, 347-343-2999 gmarose@profileadvisors.com /
ckiaie@profileadvisors.com
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