May 14, 2020 – Kleinberg Kaplan’s activism team advised MG Capital Management Ltd. (together with its affiliates, “MG Capital”) both in connection with its 2020 consent solicitation and the resulting settlement, announced earlier today, with HC2 Holdings, Inc. (“HC2”). MG Capital is led by Third Point alum and first-time activist Michael Gorzynski, who, together with fellow nominee Kenneth Courtis, has been appointed to a newly expanded Board of Directors at HC2. Mike Gorzynski and Kenneth Courtis will be key members of HC2 slate at the annual meeting of stockholders scheduled for July 8, 2020.
MG Capital’s contest at HC2 was unique because:
- It was one of the few prominent contests presented to shareholders during the coronavirus pandemic, which made it particularly difficult for activists to prevail.
- It was a high-stakes consent solicitation rather than the more typical proxy contest.
- It was a contest for the wholesale replacement of the sitting Board.
- It received 100% support from proxy advisors Glass Lewis & Co. and Egan-Jones Proxy Services, for full Board replacement and support for half replacement from Institutional Shareholder Services, Inc. This level of support is unusual absent compelling justification, and unheard of for a first-time activist like MG Capital.
- MG Capital’s bold campaign resulted in a cooperative settlement that will result in the majority of the Board being refreshed with stockholder nominees if the full company slate is elected at the July 8 meeting.
Christopher P. Davis, team leader of Kleinberg Kaplan’s nationally-ranked activist practice, said, “We are immensely proud to have advised Mike Gorzynski in his audacious fact-based campaign for change at HC2. The creative communications professionals at Profile Advisors and the relentless proxy solicitors at Saratoga Proxy Consulting helped make this possible, and MG’s results speak for themselves.”
Kleinberg Kaplan activist attorneys Rebecca Van Derlaske and Alex Shiekman were central to MG Capital’s legal team. Kleinberg Kaplan exclusively represents engaged investors in the activism space.