FairPoint should remove four board members, says Maglan Capital

Paul Sunu
FairPoint CEO Paul Sunu.

FairPoint is facing yet another request from hedge fund firm Maglan Capital to rework its company structure by ousting four board members.

Maglan’s co-founders David Tawil and Steven Azarbad said in a letter to Paul Sunu, CEO of FairPoint on Wednesday that they want board members Dennis Austin, Michael Mahoney, David Treadwell, and Wayne Wilson to "immediately tender their resignations" and warned they would push for a special meeting if no action is taken.

The hedge fund company, which owns 7.5 percent of the telco, said directors had not purchased their own shares even as the stock price tumbled recently, suggesting "a complacent Board that is misaligned with the interests of shareholders."

Maglan said it did not think those four board members were "critical to the board in any way."

Tawil and Azarbad said that they want to hold a special meeting to oust the board members if they did not willingly leave.  

"We strongly urge you to reconsider your uncooperative and non-constructive approach and instead, immediately engage with us to implement meaningful steps to enhance shareholder value," the pair said.

This is one of several requests Maglan has made for FairPoint to realign its structure. Earlier this summer, Maglan asked the service provider to create share repurchase plan, appoint a board member selected by Maglan and form a special committee to consider strategic alternatives.

In June, Maglan Capital asked the company to consider selling itself, initiating a share repurchase program, or issuing of a recurring dividend for shareholders.

At that time, Maglan praised FairPoint's "enormous strides" in stabilizing revenue and positioning the company for growth, Maglan criticized the company's board for lacking a sense of urgency as FairPoint's stock traded below its telco peers.

For more:
- Reuters has this article

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Maglan Capital asks FairPoint to consider sale of company, share buyback