Activist investor Julian Singer has used the investing partnership, JDS1, LLC, to accumulate 6.43% of HC2 Holdings, Inc (HCHC).

The target provides construction, marine services, energy, telecommunications, insurance, life sciences, broadcasting, and other services.

The company faced several activists recently, including MG Capital. This firm owns more than 6% and has called for the removal of the entire Board of Directors of HC2 Holdings.

Julian Singer and MG Capital

In his filing, Singer supports the recent removal of Phillip Falcone as Chairman. He said that replacing him with Warren Gfeller is a step in the right direction.

He urges MG Capital to avoid a long, expensive proxy fight that could further damage the company.

Singer states in the filing that “the Reporting Persons strongly believe that it is in the best interests of stockholders for other large stockholders including MG Capital and Percy Rockdale to do the same, as opposed to pursuing a costly and disruptive consent solicitation and proxy contest.”

The activist also notes that he is unable to vote for the slate of candidates put forward by the competing activist fund as it is currently proposed.

MG Capital Pushing Ahead

MG Capital is adamant about moving forward with the proxy battle. In a letter to HC2 shareholders, the firm is highly critical of the current board claiming that MG Capital “Believes the Board Has Allowed Chronic Mismanagement, Reckless Decision-Making, and Rampant Self-Dealing to Destroy Hundreds of Millions of Dollars in Stockholder Value.”

The letter further accuses the Board and CEO Falcone of excessive corporate spending, reckless and self-serving transactions, and insufficient corporate governance.”

Finally, they believe that the slate of directors who have experience at such places as Third Point, Elliott Management, Goldman Sachs, Lazard, Harvard Business School, and Ascent Media would do a better job of protecting shareholder capital and unlocking shareholder value.