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MacKenzie Affiliate Offers $1.50 Per Share of United Development Funding IV

Affiliates of MacKenzie Capital Management LP, a real estate investment firm, are offering to purchase up to nearly 1.6 million shares of United Development Funding IV (NASDAQ: UDF) at a price of $1.50 per share. The offer expires on December 2nd.

United Development Funding IV, a publicly traded REIT, has approximately 1,775 holders of record owning a total of 30.7 million shares. Trading of UDF IV’s shares was suspended in February 2016 because the company was not in compliance with rules requiring the timely filing of periodic reports with the SEC. Last month, the NASDAQ hearings panel granted UDF IV a filing extension to continue listing its shares on the exchange. The company had until October 17th to become current, but at press time, there were no filings with the SEC.

Prior to the suspension, shares of UDF IV had a 52-week trading range of $3.20-$18.31 per share. MacKenzie and its affiliates do not currently own any UDF IV shares, but the firm will pay $2.3 million if all 1.6 million are tendered.

As reported by The DI Wire earlier this year, hedge fund manager and founder of Hayman Capital Management, Kyle Bass, publicly accused the real estate investment trust of operating a “Ponzi-like real estate scheme,” by using new investor money to pay existing investors. Hayman currently maintains a short position in the common stock of United Development Funding IV and will profit if the market price for common shares of UDF decline. Less than two weeks after the accusations were revealed, the FBI raided UDF’s corporate office and seized multiple boxes from the premises. UDF vehemently denied the Ponzi allegations.

Based in Moraga, California, MacKenzie Capital Management has specialized in the area of discounted real estate securities and asset management since its formation in 1982.