During a conversation in his office overlooking downtown Birmingham, Lucas describes the lawsuit as “a minor nuisance” and says the company thinks it is “absolutely without merit.” Then, as I’m getting ready to leave, he asks, “Ever read the Bible?” He suggests I check out the first chapter of James in the New Testament. Later, I do. It’s about perseverance in the face of trying times.

In 2000, in the midst of reinventing his family’s firm, Raymond Harbert decided to start a hedge fund and began sniffing around Wall Street for potential managers. He found Philip Falcone, a 46-year-old former professional hockey player who looks vaguely like John Lennon in an expensive suit. A Harvard graduate and one of nine siblings who grew up in Chisholm, Minnesota, Falcone is in many ways Harbert’s opposite: an aggressive financial rabble-rouser to Harbert’s reclusive operator. Falcone is an activist investor who takes big stakes in companies and then demands that their managements sell off assets or make changes in business strategy. Before he joined Harbert Management, he was head of high-yield trading at Barclays Capital.

In 2001, Harbert gave Falcone his shot, offering him a $25 million fund to manage. Harbinger now has $20 billion in assets. In 2007, Falcone earned some of his reported $1.7 billion paycheck by anticipating the credit crisis and betting against the housing market and the now-defunct investment bank Bear Stearns. As a reward, he then spent $49 million on the Manhattan townhouse of Penthouse founder Bob Guccione for himself, his wife, Lisa, and their twin daughters.

According to Lucas, Falcone is the ultimate decisionmaker when it comes to the investments Harbinger makes. But Falcone and Harbert are “good friends” and are in frequent communication. Falcone runs his fund from the midtown Manhattan office of Harbert Management, which provides legal-compliance and administrative support in exchange for a share of Harbinger’s profits. Recently, Harbinger bought a chunk of stock in Cablevision Systems, saying that it “hopes to meet with the company in the very near future to discuss our thoughts.”

Falcone came up with the plan to buy stock in the Times Co., although he discussed it with Harbert ahead of time. “There were no surprises,” Lucas says. For the Times Co. investment, Falcone and Harbert teamed up with a New York University marketing professor named Scott Galloway, who is best known as the co-founder of the internet retailer Red Envelope. Galloway, 43, is a natural showboat. He and his company, Firebrand Partners, served as the public face of the transaction in exchange for 10 percent of the profits. It is not the first deal Galloway and Falcone have worked on together, but it certainly is the splashiest. Harbinger and Firebrand began accumulating Times Co. stock in January and currently hold more than 20 percent of the publicly traded class-A shares, worth around $360 million. Galloway says the purchase was based on his theory that the New York Times brand is undervalued. The idea behind the investment seems to be that the Times Co. should sell everything it owns except the New York Times and the International Herald Tribune and focus primarily on its website. He and Falcone expect a turnaround could take two to three years.

“Let me be clear: I think the newspaper business is a shitty business,” Galloway tells me, in his spartan little office at Harbert Management during an interview that took place before he became actively involved with the company. “The Sacramento Bee, the Chicago Tribune—I think a lot of those newspapers are fucked.” Not the Times, however: “The New York Times is like Yahoo with content,” Galloway says.

Preparing for a proxy fight with the Times Co., Galloway and Falcone nominated four people for its board of directors this past winter. But then the company unexpectedly capitulated, expanded its board by two seats, and invited Galloway and a cohort, James Kohlberg, the founder of a small private equity firm, to take them.

“I’m sure they were motivated by what happened to the Bancroft family,” says newspaper analyst John Morton. “Rupert Murdoch successfully divided the family to the point where he was able to take control of Dow Jones.” The Sulzbergers’ trust agreement is seen as likely to prevent the clan from being partitioned as easily as the Bancrofts were. But it’s unclear whether Sulzberger and his ally Janet Robinson, the C.E.O. of the Times Co., really know whom they’re getting into bed with.

“Scott Galloway and James Kohlberg have been good additions to our board,” Robinson says. She acknowledges speaking to Falcone on the phone but seems only vaguely aware that her new board members are the tip of a spear that extends all the way to Birmingham. “Harbert…” she says. “I know that they certainly are part of this hedge fund, but I don’t know a great deal.”

This winter, a transaction took place involving a notable building on Birmingham’s skyline. On February 29, a downtown office tower called the Regions/Harbert Plaza sold for $126 million. The tower had been built in 1989 by John Harbert, and according to his biography, he saw it as his own special mark on the city’s architectural landscape.