Publicly traded REIT, American Realty Capital Properties (ARCP), this morning announced dramatic changes to its management line up.
Nicholas Schorsch, co-founder of the American Realty Capital brand of companies, resigned as Executive Chairman and Director of ARCP and certain company-related entities, which include the non-traded REITs managed by Cole Capital.
William Stanley, a founder and managing member of broker-dealer, Stanley Laman Securities and Lead Independent Director of ARCP, has taken over as the company’s Interim Chief Executive Officer and Interim Chairman of the Board of Directors until permanent replacements can be made.
According to William Kahane, founding partner of AR Capital, Mr. Schorsch has done this “In order to reduce complexity, enhance accountability, align interests, and minimize conflicts of interest among related parties and affiliates…”
In addition to Mr. Schorsch’s resignation, David S. Kay resigned as Chief Executive Officer and a director of ARCP and Lisa E. Beeson resigned as President and Chief Operating Officer of the company.
Mr. Stanley commented, “The actions taken today will stabilize the company and are necessary to strengthen future leadership and strategy, improve governance, and complete a separation from Nick Schorsch and his affiliates. These actions build on ARCP’s significant real estate assets and asset management capabilities, and will further restore investor confidence in ARCP.”
ARCP has said it will be “unwinding” its business relationships with companies in which Mr. Schorsch holds an executive or director-level position. This process involves Mr. Stanley resigning from other Schorsch entities, including Business Development Corporation of America, Business Development Corporation of America II, American Realty Capital, Retail Centers of America, Inc., and New York REIT Inc.
The company has made other changes to its committees, with Bruce D. Frank now the Audit Committee’s Chairman and Thomas A. Andruskevich now Chairman of the Compensation Committee.
The Audit Committee is continuing its previously reported investigation into the financial statements that set these changes in motion. “Although the ARCP Audit Committee investigation is continuing, we understand that to date there has not been any conclusion of unlawful conduct by Mr. Schorsch,” commented Mr. Kahane.
The Board of Directors will be utilizing the services of Morgan Stanley & Co. LLC for advice pertaining to capital structure, business strategy, and capital allocation.