Reiterates demand that the trustees of Partners REIT immediately resign;
Rejects the trustees reckless settlement offer; and
Urges fellow unitholders to contact their trustees in support of Orange
Capital's proposal to balance the share register and restore
credibility to the REIT.
TORONTO, May 5, 2014 /CNW/ - Orange Capital, LLC ("Orange Capital"), a
concerned unitholder of Partners Real Estate Investment Trust (TSX:
PAR.UN) ("Partners REIT" or the "REIT"), today issued the following
statement in regards to the REIT:
In response to Orange Capital's call for a forensic investigation into
Partners REIT, on May 4, 2014, the REIT announced that:
The REIT's board of trustees (the "trustees") obtained material "new"
information in regards to the April 2014 transaction pursuant to which
the REIT purchased three Ontario properties ("Ontario Property
Acquisition") from Holyrood Holdings Limited ("Holyrood");
The trustees now believe that Mr. Ron McCowan, the former interim Chief
Executive Officer of the REIT, and Ms. Laura Philp, the owner of
Holyrood, have a close business relationship and should be considered
to be acting together under applicable regulation;
The trustees have "asked" Holyrood to unwind the Ontario Property
Mr. McCowan has resigned as interim CEO of the REIT.
Prior to the closing of the Ontario Property Acquisition, Mr. Marc
Charlebois and Mr. Joseph Feldman, two of the acting independent
trustees, specifically "formed a committee for the purpose of
intensively reviewing and assisting in the negotiation of the
transaction." Notwithstanding this "intense review", the Ontario
Property Acquisition was allowed to close.
Yesterday's press release represents an admission by the acting trustees
that they approved a transaction whereby two related party unitholders
now control more than 35% of Partners REIT. We believe this represents
an unprecedented admission of incompetence by a board of trustees in
the Canadian REIT industry.
Orange Capital has serious concerns as to the independence of Mr.
Charleobois and Mr. Feldman and the integrity of the trustees. We
reiterate our view that the trustees have repeatedly demonstrated that
they are unfit to serve and should immediately resign.
Orange Capital urges all minority unitholders to contact the independent
trustees to (a) demand their immediate resignation and (b) faithfully
negotiate a comprehensive agreement with Orange Capital in order to
preserve the interests of all minority unitholders. The trustee's
contact information is included at the end of this press release.
Orange Capital believes the trustees are seeking to reverse the Ontario
Property Acquisition in an attempt to deny responsibility for their
irresponsible actions. Much of the information Orange Capital
presented in its May 1, 2014 press release was (a) freely available on
the internet and (b) widely speculated about in the press and should
have been scrutinized by the trustees prior to the closing of the
Ontario Property Acquisition. We believe the trustees have made a
number of egregious errors and omissions of fact, including:
A neglectful review of the Ontario Property Acquisition;
Merely "asking" Holyrood to unwind the Ontario Property Acquisition;
Entering into a 10% second mortgage facility with a firm that has
historically financed both Mr. McCowan and McCowan & Associates;
Allowing unitholders to trade on incomplete information by failing to
provide timely disclosure around the investigation of the Ontario
Property Acquisition; and
Failing to constructively engage with Orange Capital, a unitholder that
has presented a comprehensive solution to address the REIT's failed
governance, management structures and liquidity concerns.
In response to the crisis at Partners REIT, the trustees have offered
one (1) board seat to Orange Capital. Orange Capital has summarily
rejected this proposal for the following reasons:
Orange Capital believes serving on a board with these trustees would
send a false signal to the market that we endorse their actions. We
unequivocally do not;
A single board seat alone does not provide any counter-balance to Mr.
McCowan's significant ownership in Partners REIT. Even if the Ontario
Property Acquisition is unwound, Mr. McCowan would remain by far the
REIT's largest unitholder with ownership of approximately 18%; and
We believe that any settlement that would further entrench the same
trustees should be dismissed.
Orange Capital is reviewing all available options, including legal
action against the trustees. Norton Rose Fulbright LLP has been
retained by Orange Capital as its legal advisor.
Marc Charlebois: (416) 697-0199, email@example.com
Joseph Feldman: (312) 961-2099, firstname.lastname@example.org
Kevin VanAmburg: (226) 444-8611, email@example.com
ABOUT ORANGE CAPITAL, LLC
Orange Capital is a New York based investment firm. The firm is a
value-oriented investor in event-driven securities. Orange Capital was
co-founded in 2005 by Daniel Lewis and Russell Hoffman. Prior to
founding the firm, Orange Capital's portfolio manager, Daniel Lewis,
was a director with Citigroup's Global Special Situations Group.
SOURCE: Orange Capital, LLC
For further information:
Bayfield Strategy, Inc.