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RCAP Backs Out of Cole Deal – ARCP Isn’t Pleased

RCS Capital Corporation has terminated its agreement to purchase Cole Capital from American Realty Capital Properties (ARCP) (NASDAQ: ARCP).

This news comes days after ARCP announced an accounting error and intentional concealment of said mistake, which lead to the resignations of two senior level executives.

ARCP fired back this morning with an announcement of their own.

“In the middle of the night, we received a letter from RCS Capital Corporation (“RCS”) (NYSE: RCAP) purporting to terminate the equity purchase agreement, dated September 30, 2014, between RCS and an affiliate of ARCP. As we informed RCS orally and in writing over the weekend, RCS has no right and there is absolutely no basis for RCS to terminate the agreement. Therefore, RCS’s attempt to terminate the agreement constitutes a breach of the agreement. In addition, we believe that RCS’s unilateral public announcement is a violation of its agreement with ARCP,” said ARCP in a statement.

It was unclear which executive from ARCP was quoted in the announcement.