Kingsway Financial Services Inc. (NYSE: KFS) shares surged higher after an activist shareholder threatened to take action to unlock value. The Stilwell Group, which owns a 9 percent stake in the firm, demanded that the company institute aggressive cost-cutting measures and focus on its core business in a Schedule 13D filing with the SEC. If not, the hedge fund vowed to seek board representation during the next annual meeting scheduled for February 10th of next year.

“If a majority of owners of Kingsway support our nominees on February 10th, we pledge to work aggressively to reduce expenses, to exit non-core lines, and to reduce balance sheet risk,” said managing member Joseph Stilwell. “Further, if we win, I commit to hold our 9 percent stake for at least the next three years.”

Kingsway has acted by selling non-core businesses and getting out of unprofitable insurance lines as well as cut 162 jobs and freeze salaries to lower costs. However, the firm still reported a net loss of $17.4 million, or 32 cents per share, in the third quarter. As a result, Stilwell recommends that shareholders vote to remove CEO Shaun Jackson and Michael Walsh and replace them with his own slate of directors. The result could be a much improved bottom line and higher profits for shareholders.

Related Companies
The Chubb Corporation (CB)
The Allstate Corporation (ALL)
The Travelers Companies (TRV)

The Chubb Corporation (NYSE: CB) may not sound attractive, but many insiders are a believer in the stock. The firm repurchased some 5.9 million shares during the third quarter and said it would buyback up to 20 million shares over the next year while paying a dividend of 33 cents per share. This is a clear demonstration of financial strength and confidence in the company.

Several other notable hedge funds are also buyers of the stock. Dreman Value Management is well known for its 17% annualized returns and counts the stock among his holdings. Meanwhile, Dodge & Cox is another high profile owner that has posted an annualized return of over 14.5% over the past 10 years. Combined, this is good news for the Chubb Corporation.

During the third quarter, Chubb Corporation reported $264 million in net income compared to $738 million a year earlier. The losses in the third quarter will be about $400 million and come as a result of catastrophes like Hurricane Ike, which included Chubb’s shares in the Texas Windstorm Insurance Association. However, the S&P recently upgraded the stock to A+ while Best affirmed it at A++.

Overall, the Chubb Corporation may be an attractive way to get on the ground floor of this strong stock with other insiders and the company itself!

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HCC Insurance Holdings Inc. (HCC)
The Travelers Companies (TRV)
Loews Corporation (L)

The Securities and Exchange Commission (SEC), concerned about its recent bad press, continues to prosecute insider trading through the Christmas season. Last week, the regulatory body charged seven individuals and two companies involved in an insider trading ring.

The SEC alleged that Matthew Devlin, formerly of Lehman Brothers, traded on and tipped his clients and friends with confidential and non-public information about 13 impending corporate transactions. Some of these friends, who worked in the financial or legal professions, also tipped off other clients.

Devlin obtained the privileged information from his wife, a partner in the NYC office of an international public relations firm working on the deals. The illicit trading occurred from at least March 2004 through July 2008, yielding more than $4.8 million in profits. Devlin was also rewarded with cash and luxury items in exchange for the information, including a widescreen TV, leather jacket, and Porsche driving lessons.

The traders attempted to avoid detection by trading in the securities of the target companies in numerous accounts that were not associated with Lehman or Devlin. To further conceal their illicit trading, at least two of the defendants sold off some of the shares they had purchased based on inside information prior to public announcements of the deals. In addition, Devlin and one of his tippees arranged to buy shares on Devlin's behalf so Devlin could profit from the nonpublic information but evade scrutiny.

The companies targeted from this scam included: InVision Technologies, Inc.; Eon Labs, Inc.; Mylan, Inc.; Abgenix, Inc.; Aztar Corporation; Veritas, DGC, Inc.; Mercantile Bankshares Corporation; Alcan, Inc.; Ventana Medical Systems, Inc.; Pharmion Corporation; Take-Two Interactive Software, Inc.; Anheuser-Busch, Inc.; and Rohm and Haas Company.

"The Commission is unwavering in its determination to pursue illegal insider trading by securities professionals, lawyers, and others," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "Today's enforcement action is another example of the exemplary working relationships among the SEC, criminal authorities, FINRA and other self-regulatory organizations."

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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Tidewater Inc. (TDW)
GulfMark Offshore Inc. (GLF)
American Commercial Lines Inc. (ACLI)

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.

Related Companies
Transcontinental Realty Investors (TCI)
American Realty Investors (ARL)
NTS Realty Holdings LP (NLP)

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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OpenTV Corp. (NDAQ: OPTV) received a proposal from an activist investor that shareholders may want to consider. Discovery Equity Partners proposed that the firm undertake a Dutch Auction Tender Offer to repurchase at least $30 million of common stock. The hedge fund believes that this action will help to unlock substantial value in the company’s stock price that has been falling in recent weeks.

Discovery backed their proposal with four key facts:

1. The current cash balance of almost $100 million far exceeds the amount necessary to run the business.
2. The current level of cash is well outside the bounds of normal business practices for comparable firms.
3. Retaining cash for potential acquisitions threatens to distract management, introduce risk and dilute shareholder value.
4. The share repurchase will greatly enhance value for all shareholders.
   

According to the Schedule 13D filing with the SEC:

We believe OpenTV will generate over $10 million in free cash flow in 2008, net of capital expenditures, up from $7 million in 2007.  Since Kudelski SA acquired a controlling stake in early 2007, management has expressed its commitment to improve profitability and appears to be making progress. Thus, we expect operating cash flow to remain positive.  We think it is reasonable for OpenTV to maintain $25 million of cash (approximately three months’ sales) to demonstrate financial stability to customers and weather extraordinary business pressures.  Retaining cash considerably beyond that amount appears to contradict management’s confidence in the business.

OpenTV’s cash has nearly doubled from $52 million to $99 million over the four years ended September 30, 2008.  Compared to over 1100 comparable U.S. public companies (based on market capitalizations of $50-500 million and revenues of over $50 million), OpenTV’s ratio of cash-to-revenue ranks in the top decile, which we believe indicates lax balance sheet management.  We believe this proposal is a start toward better stewardship of shareholder resources

A critical element of OpenTV’s improving performance is the recent divestiture of several non-core businesses amassed through acquisitions.  We fear that excessive idle cash could encourage new acquisitions that would reintroduce management distractions and unknown risks.  We are also concerned that acquisitions might be pursued to meet the global business objectives of Kudelski rather than for the financial benefit of all shareholders.  Further, we expect any acquisitions to be highly dilutive to shareholders because there are few companies OPTV can acquire for less than its current valuation of only 0.6x revenue and 5.2x EBITDA, based on our projected 2008 results for OpenTV and its 3-month average stock price of $1.21 as of December 17, 2008

We believe a partial return of excess capital to shareholders is a smart financial move. The Dutch Auction share repurchase method will provide an orderly mechanism for shareholders seeking liquidity, while greatly improving the potential return on equity for shareholders who choose to retain some or all of their OpenTV shares. After the repurchase, the business will still be well funded with approximately $70 million of remaining cash.

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Motorola Inc. (MOT)
News Corporation (NWS)

NitroMed (NDAQ: NTMD) buyout offer from Archemix received some opposition from an activist hedge fund. Deerfield Partners said that the merger overvalues Archemix and contains numerous conflicts of interest. Moreover, Deerfield, which holds a 12% stake, offered to acquire the company for $0.50 a share, liquidate the company and distribute the proceeds to shareholders. This would represent a substantially higher value than the current offer on the table.

The majority of NitroMed’s value can be found in its $17.8 million in cash, equivalents and short-term investments as of September 30th. The company also stands to get an additional $26.3 million from the pending sale of heart failure drug BilDil, which was approved for African-American patients in 2005 but never gained significant market share. Assuming these sales, NitroMed would have about $44 million in cash to offer either shareholders or Archemix.

“We ask that you seek a tangible means to deliver NitroMed shareholders fair value for their ownership of the BilDil assets,” said James Flynn of Deerfield. “If there is a means for shareholders to appreciate your current proposal provides in excess of $0.50 per share, it should be simple to articulate, and the shares should appreciate appropriately. If this cannot be demonstrated and you remain committed to your currnt course, additional costly actions will be unavoidable.”

It’s not common for investors to push for liquidation, but Deerfield believes that NitroMed’s cash, including the payment for BilDil, minus the costs winding down the company, would allow a distribution to shareholders of $0.50 per share in cash and potentially a good deal more. This would represent a substantial premium over the firm’s current share price of just $0.36 per share.

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The Securities and Exchange Commission's (SEC) EDGAR may have some competition on its hands as the industry consolidates. Morningstar (NDAQ: MORN), a popular investment research and data firm, has acquired 10-K Wizard, a premier provider of SEC filings research and alert services, for $12.5 million subject to working capital adjustments. 10-K Wizard is one of many SEC filings firms that has been developing data mining tools to make sense of complex filings as well as compare different filings and time periods.

Other competitors include public companies like Accelerize New Media's (OTC-BB: ACLZ) SECFilings.com and EDGAR Online's (NDAQ: EDGR) EDGAROnline.com platforms. Morningstar will use the acquisition to add to its overall research services and said that 10-K Wizard's technology can be applied to documents of all kinds, like its mutual fund prospectuses.

The SEC is bringing more transparency to the marketplace by introducing the ability for pubicly traded companies to data-tag their financial statements using its new XRBL mark-up language. Instead of sifting through one form at a time, investors will be able to instantly search and collate information to generate retports and analysis from thousands of companies and forms.

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News Corporation (NWS)
Interactive Data Corp. (IDC)

AIG Group (NYSE: AIG) received a letter from their dear friend Hank Greenberg Monday inquiring as to the status of government funds being used to fix the firm. The former Chief Executive has good reason too – he still owns nearly 8% of the company.  Mr Greenburg’s exact question dealt with their use of funds to buyout CDO counterparties at what he saw as favorable terms.

Here’s a copy of the letter filed in their Schedule 13D/A:

There are any number of things that we ought to catch up on, but you are probably busy and so am I, so I’m not sure it will happen in the near term.
 
I am curious about the latest change in the AIG terms with the New York Fed (still far from the right mark). One of the Maiden Lane special purpose vehicles purchased approximately $50 billion of CDOs at par, at least that is what has been reported, and obviously canceled the default swaps. It is hard to believe that the counterparties would be carrying the CDOs at par and not have marked them to market.  If so, what is the rationale for buying them back at par?
 
The counterparties were advised to keep the approximately $35 billion of collateral that had been transferred to them.  AIG wrote down the CDOs to reflect their underlying value which was approximately 50%.  I am sure I am missing something, and I would be more than interested in finding out what transpired.  It certainly seems it was very good for the counterparties.

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Bank of America (BAC)

TM Entertainment & Media, Inc. (AMEX: TMI) may be one of the most inactive stocks on the market, but recent developments make it worth watching. Activist investor Phillip Goldstein of Bulldog Investors sent a letter to the board of directors demanding that the company be dissolved and the proceeds be distributed to shareholders. While offering no guidance as to the potential value of a liquidation, the fact that it is being proposed at such a low price suggests that it would generate value.

According to the letter:

Opportunity Partners L.P. is a shareholder of TM Entertainment and Media,Inc. (TMI) and is part of a shareholder group that owns more than 22% of TMIs publicly held shares.

In view of current market conditions, we believe there is virtually no chance that TMI can complete a transaction by October 17, 2009.  Since its stock price is significantly below the value of the trust account, we believe it is in the best interests of TMIs shareholders to dissolve TMI as soon as possible.

Please advise us by December 5, 2008 whether the board will (1) promptly take the necessary actions to dissolve TMI and make a liquidating distribution to the public shareholders or (2) hold an annual meeting as soon as possible. At the meeting we intend to (1) propose a bylaw change to increase the size of the board, (2) nominate a slate of directors to fill all open seats, and (3) submit a proposal to dissolve TMI.

If neither a proposed dissolution nor an annual meeting is announced by Friday, December 5, 2008 we intend to file a petition pursuant to section 211(c) of the Delaware General Corporation Law in the Delaware Court of Chancery to ask the Court to summarily order TMI to hold an annual meeting to elect directors.

TMI is a blank check company that was designed to serve as a vehicle for the acquisition of an entertainment company. Now that this possibility has been eliminated given the poor markets, many investors including Bulldog are demanding their money back. Whether or not this happens remains to be seen, but if it does take place, the liquidation value could exceed the market price.

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Yahoo Inc. (NDAQ: YHOO) may have evaded one of the largest activists – Carl Icahn – but more hedge funds are coming out of the woodwork. Ivory Investment Management, which owns a 1.5% stake in the company, pushed the internet company to sell its search business to Microsoft Corporation (NDAQ: MSFT), adding to the pressure it already faces to restart talks with its rival.

The move also added to speculation that Yahoo was also intending to put itself up for sale. Recent actions by management, such as a move to lean down severance packages, had many speculating that the firm was preparing to sell itself. Investors have insisted that a sale could be a way out of this mess with Ivory insisting that the $15 billion raised could help restore its troubled finances.

Curtis Macnguyen, who manages the Ivory fund, said in a letter to the board that it was acting unreasonably in rejected Microsoft’s offer and insisted that the deal could help Yahoo improve its profits and double its slumping share price to $24, according to his calculations. In fact, if Yahoo were to retain 80% of the revenues from Microsoft’s search ads, it would boost profits by $500 million annually.

Whether or not this speculation turns out to be true remains to be seen, but Yahoo is definitely a stock worth watching given the potential gains…

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Microsoft Corporation (MSFT)
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Global Med Technologies (OTC: GLOB) is trading well below its intrinsic valuation, according to at least one activist hedge fund. Victory Park Capital principal Richard Levy insisted in a letter to the board that if the equity markets do not reflect the value of the company then it is incumbent upon the board to take action to realize that value for shareholders.

As a result, Victory Park recommended one of two options:

1. Publicly auction the company for sale to a strategic or financial buyer.
2. Pursue a buyout transaction led by Victory Capital.
   

Victory Capital announced that they are prepared to purchase all of the company’s outstanding equity securities that it does not already own for $1.10 per share in cash, subject to completion of limited, confirmatory due diligence and negotiations. Moreover, they are prepared to move quickly to realize this transaction and set a deadline of December 16th for a board response.

Given that this number represents a 22% premium to the current market price for Victory Capital’s offer or even more for a competitive auction, this situation is definitely one worth watching for shareholders and investors comfortable in playing such opportunities.

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Dillard’s Inc. (NYSE: DDS) shares surged higher after an activist investor demanded to see its records. Barington Capital Management demanded to see records of everything from the firm’s plane fleet to business expense reimbursements in a Schedule 13D/A filing with the SEC. Why? According to the filing:

The purpose of this demand is to enable Barington and Clinton to investigate and communicate with the Company’s stockholders regarding matters relating to their mutual interests as stockholders, including, without limitation, the use of corporate assets, the levels and types of compensation, perquisites and benefits provided to directors and executive officers of the Company or related parties, the nature of any family, business or personal relationships between the Company’s executive officers and directors, Board oversight and certain decisions by the Board or its committees regarding the foregoing matters or otherwise affecting the Board, the management or corporate governance of the Company or other interests of stockholders.

This isn't the first time that activist shareholders have targeted Dillard's either. In March, Mitarotonda and Hall requested copies of Dillard's books and records in anticipation of a proxy fight. Luckily, Dillard's eventually reached a deal with the shareholders and added four new Class A directors to its board. What happens now remains to be seen, but shareholders are clearly bullish on the prospects.

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Meadow Valley Corporation (NDAQ: MVCO) shares jumped higher after one of the stock’s biggest shareholders voiced opposition to its planned merger. Carpe Diem Capital Management disclosed a 7.35% ownership stake and demanded that the company not lower the buyout price to anything lower than the proposed $11.25 per share.

The Meadow Valley board is meeting in the coming month to discuss whether or not to accept a lower offer for the company. However, the hedge fund threatened to nominate its own slate of directors to affect an organic turnaround rather than accept a lower offer. These initiatives would include cost cutting, focused management, and various other actions to unlock value.

According to the Schedule 13D/A filing with the SEC:

To reiterate again, we do not want to take over and run Meadow Valley, we want our existing Board to complete the proposed transaction on time and on price. We offered our assistance to the Board in order to give ourselves and other Shareholders comfort that the transaction as contemplated will happen. Your continuing to ignore a major shareholder with more experience and a track record of success has forced us to take the view expressed herein. Only as a last resort, and if the Board cannot consummate the transaction on time or at price, would we take the actions described above. It should also be stated that we would expect, once Shareholders have spoken, to have the full cooperation from the Board and management.

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Magnetek, Inc. (NYSE: MAG) directors and management may find themselves out of a job if a large activist hedge fund gets their way. Riley Investment Management (RIM) holds an 8.8% stake in the company and recently sent a letter to the board suggesting that the firm put itself up for sale. The hedge fund believes that the company's market size and ongoing pension liability will make it difficult for shareholders while its brand and niche may be interesting to potential buyers.

Here's a copy of the letter:

As you may know, Riley Investment Management LLC has been an investor in Magnetek for over 7 years. During this time, we have seen the Company transform itself from a bloated undisciplined company to a business with a significant presence in strong niche markets. While we have been pleased with the Company's operational performance, the devotion of the management team and the improved balance sheet, we strongly believe that the best course of action for the shareholders would be to immediately begin a sale process of the Company. We believe that this process could garner a price at significant premiums to the current market capitalization and attract multiple large bidders.

The Company's most recent quarter was impressive. Revenues of $26.4 million were up 16%, your book to bill was 118% and your cash increased to $16 million. Most importantly, operating income almost doubled from last year. These numbers were particularly strong given your investment in the alternative wind business. We applaud your improvements to the operations.

However, we believe that your market size, market capitalization and ongoing pension liability will make it difficult for your shareholders to receive fair value on the open market. Conversely, it is our opinion that larger corporations who have long been interested in the Magnetek brand and niche markets will be willing to acquire the Company's businesses at significantly higher values than the current market capitalization.

Moreover, we believe that value may be best maximized by selling your businesses in pieces as opposed to a total sale. This process, while perhaps more time consuming and difficult, can result in each business unit receiving full value as opposed to a sale to a single buyer who will discount the pieces that they don't want.

We urge you to formally begin this process right away. Additionally, as a large shareholder with a significant track record in creating shareholder value we request a board seat immediately. Given our involvement in the sales of companies with several business units (i.e. Alliance Semiconductor, Celeritek), we believe we can be a great help in this process. Additionally, it is our experience that a large shareholder involved not only adds a sense of urgency but also creates an environment in which service fees are more carefully reviewed and possible options are more broadly considered.

We have written many letters to the board over the last few years and made many requests of management. This one is unique in that we hold the Board and management of Magnetek in high regard. However, our view that shareholders would recognize more value through a formal sales process is strong, and we hope that this message is well received. We will continue to evaluate all of our options as it relates to our Magnetek position.

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General Growth Properties (NYSE: GGP) shares surged higher after activist investor Bill Ackman’s investment was followed by another large purchase by Morgan Stanley. The stock nearly doubled at the end of November when Ackman’s Pershing Square disclosed a 19.9% ownership stake in the troubled real estate investment trust. The rally was extended this week after Morgan Stanley increased its stake to 5.1%, presumably upon making a similar conclusion to that of the hedge fund.

General Growth Properties stock has plummeted over the past two months as investors grew increasingly concerned that the heavily leveraged mall operator may be unable to refinance billions of dollars of debt coming due late in 2008 and 2009.  The REIT had hired the Sidley Austin law firm as a financial advisor to refinance its hefty debt, but very little progress appears to have been made.

Investors are now speculating that Pershing Square and Morgan Stanley may be betting on a change of heart on the part of banks. The bailout packages designed to encourage lending may make the prospects of a refinancing more probable. Alternatively, others are betting that Morgan Stanley, Pershing Square or other large institutions/funds may be interested in providing financing using successful properties as collateral. In fact, Pershing Square did something like this with Borders Group where it held the international division as collateral for a high-interest line of credit to keep the company going…

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Consolidated-Tomoka Land Co. (AMEX: CTO) directors may face some competition at the company’s next annual meeting. Wintergreen Advisors, which owns a 25% stake in the firm, made several proposals aimed at improving corporate transparency and generating shareholder value in a regulatory filing with the Securities and Exchange Commission.

Wintergreen believes that Consolidated-Tomoka is sitting on several promising properties, including its Daytona properties and others in Volusia county. The hedge fund has held discussions with the company on maximizing the value of these properties through direct development or partnerships, but no significant progress has yet been made.

On November 20, Wintergreen delivered three shareholder proposals to Consolidated-Tomoka designed to add board members and improve corporate governance. These proposals included the nomination of four independent candidates to the board, a provision requiring annual election of all directors, and a provision requiring the chairman of the board to be an independent director.

Wintergreen’s nominations to the board of directors include four highly qualified individuals who are independent from the hedge fund and who they believe possess the expertise necessary to work to restore and enhance shareholder value. Furthermore, the nominees are committed to exploring all alternatives to increase shareholder value.

Wintergreen believes that its second proposal to hold board elections annually is the strongest way for shareholders to influence the directors of any corporation. The current board’s staggered elections prevent shareholders from effecting change inside of three years as only one third of the board is up for election per year.

Finally, Wintergreen believes that its third proposal to mandate an independent chairman of the board is the best way to ensure that management is treated objectively by shareholders. In fact, the National Association of Corporate Directors includes independent board leadership as one of its key principles to strengthen corporate governance.

Wintergreen’s proposals have been seen in a positive light by many shareholders as the price edges higher with each SEC filing threatening action. The hedge fund’s large stake in the firm also ensures that its voice will be heard if it attempts a coup to take over the board as it has hinted. All in all, this is good news for shareholders who could finally see some value unlocked in Consolidated-Tomoka.

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Yahoo Inc. (NDAQ: YHOO) shares are trading lower despite news of an increased investment by billionaire activist Carl Icahn. The corporate raider had pressured the firm to sell itself to Microsoft for a substantial premium to the current market price. Since Microsoft's offer was rebuffed, shares of Yahoo have fallen sharply as the economic crisis deepened.

So, why has Carl Icahn increased his investment despite the rejected bid? Unfortunately, the actions of almost all activist investors and hedge funds are hidden, and Carl Icahn is no different. Despite the lack of information, there is no shortage of speculation on the part of shareholders and the media.

Some believe that the timing of Carl Icahn's investment may indicate a new CEO announcement may be coming up soon. Others insist that Microsoft may be ready to come back to the table to negotiate on a new price - lower than the previous one but higher than the current market price. And finally, others believe a new partnership may be in the works with Google or other players.

Some shareholders believe that Carl Icahn's motives may be more financial than activist. Currently, Yahoo shares are trading on the cheap with a lot of cash on the books and no long-term debt. Carl Icahn's purchase comes out at just above book value  while Yahoo's brands and traffic continue to remain strong.

But regardless of the motive, Carl Icahn's investment is good news for shareholders...

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Microsoft Corporation (MSFT)
Time Warner Inc. (TWX)