Nelson Mullins Riley & Scarborough partner Charles R. “Rusty” Pickering is advising the Home Builders Association of Georgia on a proxy battle for control of Builders Insurance Group.

Builders Insurance Group was founded by homebuilders in 1992 to provide workers’ compensation insurance to homebuilding companies. Since then it has grown to become the largest mutual captive insurance company in Georgia, said state Insurance Commisioner John W. Oxendine.

Home Builders Association members, who comprise a large percentage of Builders Insurance Group’s policy holders, allege that the company’s directors overpay themselves, a result of the company’s growth and success.

Builders Insurance Group has paid “excessive salaries, fees and indirect compensation to its directors, reported at more than $1.9 million in 2006 and 2007 alone,” the Home Builders Association said in a statement.

“This is out of line with market compensation for similarly sized companies and … far exceeded directors’ compensation at large public companies like United Parcel Service and Delta Air Lines,” the association said.

The Home Builders Association is launching this battle because "Builders [Insurance Group] has been endorsed by an alternative association, the Contractors Benefit Association (CBA), with much lower dues," the company said in a statement.

"This is a self-serving effort by HBAG to grow and maintain its membership rolls at a cost of increased expenses to the policyholders of Builders Insurance," the company said.

The Home Builders Association will submit to its members for approval a slate of six new directors, Pickering said. If the policyholders approve the new board, the association will submit a written consent and a proposed new company charter to Oxendine for approval.

The new charter would include provisions such as allowing Home Builders Association members to set the number of directors on the company’s board and to remove a director with or without cause. The new charter would also make it easier for policyholders to call a board meeting, Pickering said.

“We’re putting in place good corporate governance procedures for when the directors are acting improperly,” Pickering said. “I have no reason to believe the insurance commissioner won't approve this.”

Oxendine, who described the dispute as a “domestic quarrel,” said the proxy battle may be unprecedented in Georgia.

“We really haven’t seen a fight like this before,” Oxendine said. “We haven’t had an insurance company and its founding association have a falling out like this.

“I will tell you [Builders Insurance directors] are paid generously,” Oxendine said. “What is considering being overpaid, that is a major issue in America.”

This isn't the only proxy battle that Pickering is working on. The Nelson Mullins partner is also advising Pentwater Capital Management LP, a Chicago hedge fund, on its proxy contest to force Atlanta's Post Properties to consider offers to sell itself.