Trico Marine Services Inc. (NDAQ: TRMA) directors may be forced to fight for their job after an activist shareholder opposition to the company’s current plans. Kistefos AS, which owns a 22% stake, wrote a letter to the board expressing its disappointment about the extraordinary loss in value since the company emerged from bankruptcy in 2005.

“I write today to express our deep concern about the extraordinary loss in value of the company’s shares and about the current operations, direction, management and governance of the company,” said the hedge fund in a letter. “Nevertheless, we believe that there is significant inherent value in the company and we wish to work with management and the Board of Directors to help restore it.”

Kistefos believes that the first step in unlocking this value is to replace the board of directors with its own slate of directors. The hedge fund noted that it is an experienced long-term investor with a strong track record of value creation through successful investment in turnaround companies. The nominees to the board promise to bring significant and relevant operating experience, a track record of generating attractive returns and delivering value to shareholders.

Kistefos outlined several ways in which it could act to improve the company:

1. The company failed to capitalize on high spot rates for shipping because of its bias towards long-term charters. The board would terminate this line of thinking and act in any way that generates the highest returns for shareholders.
2. Management has failed to oversee construction of new vessels and contracts, which has resulted in substantial unnecessary losses. The board would act to make sure that the company does not make any more mistakes of this nature.
3. The company took on substantial debt to make an acquisition in the subsea segment, which has consistently lost money so far. The board would reduce the amount of debt on the books and instead invest in the company’s own stock through share buybacks.
   

According to the fund, “in summary, while we remain confident that, over the very long-term, the industry will offer the Company opportunities for organic and external growth and increased profitability, the Company faces significant challenges in the near future, including: completing the integration of its two recent major acquisitions and reduction of related indebtedness; initiating the internationalization of the subsea operations; enhancing the quality and reach of its supply vessels operations; and returning to satisfactory profitability, all within the context of a global recession.”

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Wilshire Enterprises, Inc. (AMEX: WOC) may have plans for the future but at least one shareholder is seeking to liquidate the real estate company. The firm has been hit hard by the sharp decline in housing combined with reduced access to debt and equity financing in a troubled market. As a result, many investors are questioning the best course of action going forward.

Management announced last week that it would move the firm in a new direction aimed at acquiring new properties and existing loans on attractive terms, employing an extensive network of contacts in the management and finance industries. Essentially, management is proposing that the firm take advantage of the low priced environment and attractive financing to profit in the long-run.

Full Value Advisors, which owns a 21% stake, doesn’t share management’s confidence. The activist hedge fund proposed that the company hold its annual shareholder meeting and explore a liquidity strategy instead of a growth strategy. The fund believes that pursuing a bird in hand liquidity event is a superior risk adjusted alternative to growing the company, particularly given its structure.

Full Value Advisors plans to institute this liquidity plan by nominating its own slate of directors to the board. Two positions would have been vacated on the board had the company held its 2008 annual meeting while the fund also proposed three other candidates for other spots that may open up if its first proposal to revamp the board is passed.

Wilshire is engaged primarily in the ownership and management of real estate investments in Arizona, Texas and New Jersey. Wilshire's portfolio of properties includes five rental apartment properties with 950 units, 10 condominium units, two office buildings and a retail/office center with approximately 200,000 square feet of office and retail space, and slightly more than 19 acres of land.

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White Electronic Designs Corporation’s (NDAQ: WEDC) earnings conference calls may be turning into more of a soap opera after a hedge fund was jilted. Wynnefield Partners said in a Schedule 13D/A filing with the Securities and Exchange Commission (SEC) that they were unable to ask questions on the company’s conference call despite repeated attempts. As a result, the 9.8% holder then submitted a letter nominating its own directors to the board.

White Electronic Design doesn’t exactly have the best track record with shareholders. The existing board has granted cash-less, dilutive equity awards to management that vest 50% each year without requiring management or the market price of WEDC’s stock, to meet any performance targets or financial metrics. The board also refused to disclose of consider bona fide acquisition proposals at a slightly premium to market in an apparent effort to save their jobs. And finally, the board squandered more than $25 million on two failed acquisitions and a drawn out termination process for its former chief executive.

Wynnefield Partners proposed several changes that it would make at the company to address these concerns:

• Refrain from risking additional shareholder capital on any further acquisitions.
• Provide shareholders with the honest and transparent process that they deserve by exploring the full range of “strategic alternatives”.
• Cease diluting shareholders via the outright grand of “risk-less” equity awards to management that have no performance criteria.
• Implement compensation policies that align the interest of management and the board with interests of shareholders.

"WEDC’s current board and management have presided over a massive destruction of shareholder value," said Wynnefield Partners in its letter to the board. “Why should shareholders believe that the current board now suddenly has the ability to reverse its historical failures and the desire to correct the lack of alignment of its interests with the interests of all WEDC’s shareholders. With the exception of Ed White, virtually no board member has ever purchased a share."

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