Stockholder Group Moving Forward with New York REIT Board Shake-up
WW Investors LLC, a jointly owned entity of Michael Ashner and Steven Witkoff, issued a response to the now terminated merger agreement between the AR Global-managed New York REIT (NYSE: NYRT) and JBG/Operating Partners. In addition to airing their grievances, the pair are seeking to elect five director nominees, including themselves, to the board.
On Tuesday, New York REIT, formerly known as American Realty Capital New York Recovery REIT, announced that it would no longer pursue the proposed merger, which would have created an $8.4 billion REIT with properties in New York and the Washington D.C. area. Instead, the company intends to adopt a new plan of selling individual assets.
Ashner and Witkoff, who own a combined 1.2 million shares of NYRT stock, have been outspoken opponents of the proposed agreement between the REIT and private real estate firm.
“We are pleased that NYRT’s board has finally woken up to what NYRT stockholders have known all along – that the combination with JBG was a poor decision and not in the interest of NYRT stockholders. The termination of the JBG combination and announced asset sales plan, albeit belated and very costly, are steps in the right direction,” Ashner commented.
He added, “We continue to believe, however, that the current leadership is not composed of the right set of individuals needed to lead our company through this important process. The board and management have a disconcerting track record of repeated serious mistakes that have hurt stockholder value. They have acted brazenly in their self-interest to the detriment of stockholders and lost credibility with the market, with their stockholders and with potential buyers for the company and its assets.”
Asher criticized the leadership team for the “serious and unremedied” conflicts of interest that could arise if a sale were to take place, noting that the company’s advisory agreement encourages “unwarranted disposition fees.”
The stockholder duo proposes to elect five directors to the board including:
Michael Ashner – Chairman and chief executive officer of Winthrop Realty Trust
Steven Witkoff – Chairman and chief executive officer of The Witkoff Group
James Hoffmann – Former partner and senior vice president of Wellington Management Company
Gregory Hughes – Principal for Roscommon Capital Limited Partnership
Neil Koenig – Co-founder and co-managing partner of Imowitz Koenig & Co. LLP
“NYRT should be led by experienced, independent management and directors who have the real credibility and expertise to successfully execute on a corporate sale or asset sales plan. Our team has a strong history of creating stockholder value through REIT asset liquidations and sales, including four successful liquidations of publically-traded REITs and a sale of a fifth one,” said Ashner.
Ashner and Witkoff are also requesting to move the 2016 Annual Meeting of Stockholders to an earlier date. As it stands, the meeting is scheduled on October 24th.
