Angelica Corporation (NYSE:AGL) board members and executives may be in trouble soon after a major shareholder said it would nominate its own slate of directors during the company's next annual meeting, according to a Schedule 3D/A filing with the SEC.

Pirate Capital, which owns a 9.8 percent stake in the company, said today that it intends to nominate Thomas R. Hudson Jr. and Christopher Kelly to the board of directors at the company's upcoming 2007 annual meeting. The move follows a long history of trying to force the company to undergo changes that would unlock value for shareholders.

Interestingly, Pirate Capital has began to unwind its position in the company since April of this year. June and July showed sales amounting to 937,257 shares, which is a 15 percent reduction in its stake. Some investors are questioning why the hedge fund would cut its stake ahead of a signature battle to replace directors and implement its plans for the company.

Pirate Capital has a long history on Wall Street as being the premier activist hedge fund. Last year, the hedge fund ran into problems, however, after it reported a steep loss and several of its limited partners pulled their money forcing the fund to sell off many of its stakes at further losses. Now, Pirate appears to be back on track with a new set of activist targets.

Combined, these factors make AGL a stock worth watching!

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