Orange Capital Calls For an Independent Forensic Investigation of Partners REIT and Transactions Undertaken By or Under the Direction of CEO Ron McCowan

- Expresses Shock at Poor Governance and Lack of Disclosure by Independent Trustees

- Announces Financing Proposal to Protect Minority Unitholders

TORONTO, May 1, 2014 /CNW/ - Orange Capital, LLC ("Orange Capital" or "We"), a concerned unitholder of Partners REIT (TSX: PAR.UN) ("Partners" or the "REIT"), today announced that in light of a number of recent questionable transactions and announcements at Partners, it is demanding an immediate forensic investigation of the REIT and of transactions undertaken by or under the direction of CEO Ron McCowan and the newly appointed independent Trustees of the REIT ("Trustees").

We believe that the purchase and sale agreement between the REIT and Holyrood Holdings Limited ("Holyrood") to acquire four retail centers first announced by the REIT on December 18, 2013 (the "Ontario Property Acquisition") is a related party transaction under applicable securities laws and in the very least is a change of control by joint actors that prejudiced and disregarded the interests of minority unitholders. We believe the actions taken by the Trustees both in connection with the Ontario Property Acquisition and the precipitously announced financing on April 30, 2014, collectively exhibits poor disclosure and total disregard for the Canadian capital markets.

In order to preserve the interests of minority unitholders, Orange Capital has made a financing proposal to Partners whereby it offered to purchase $15,000,000 of convertible securities with voting rights, subject to the appointment of three (3) new Trustees, including one (1) Orange Capital nominee (the "Proposed Financing"). To demonstrate its willingness to align itself with existing minority unitholders, Orange Capital has offered to limit its voting rights associated with the Proposed Financing to 15% of the outstanding units. Orange Capital urges fellow unitholders to contact the independent Trustees in support of its proposal to preserve their interests. The contact information of the independent Trustees is included at the end of this release.

Recent concerning events at Partners include the following:

  • On December 18, 2013, three weeks after McCowan & Associates acquired 14.95% of the units of Partners, Partners entered into the purchase and sale agreement for the Ontario Property Acquisition. The transaction announcement offered no disclosure on the vendor(s). Notwithstanding this poor and, we believe, incomplete disclosure, Mr. Ron McCowan continued making purchases of Partners units until March 21, 2014;
  • On February 11, 2014, Partners announced it had agreed to amend the terms of the Ontario Property Acquisition and disclosed Holyrood as the vendor. The press release did not allude to any possible related party or joint actor connections between Mr. McCowan and Holyrood;
  • On February 14, 2014, Ron McCowan was named interim CEO of Partners. The REIT paid McCowan & Associates a $1.5 million termination fee to terminate the management agreement and relocated to the offices of McCowan & Associates in Barrie, Ontario - which we have since learned are owned by Holyrood;
  • On April 23, 2014, despite analyst reports and numerous media articles suggesting that the Ontario Property Acquisition required greater disclosure on the value of the properties and the relationship between Mr. McCowan and the Vendor, Partners closed on the Ontario Property Acquisition. Holyrood received 18.7% of the REIT's issued and outstanding voting units as consideration for the assets. Each of Marc Charlebois, Kevin VanAmburg, and Lindsay Weiss served as independent Trustees at the time of the Ontario Property Acquisition closing; and
  • On April 30, 2014, Partners disclosed that it received commitments for $15 million of second mortgage financing at a cost of 10%. The announcement offered no incremental information despite Mr. McCowan's recent public comments suggesting the REIT's plans include lower refinancing costs and future dividend increases. This financing was precipitously announced after a week of preliminary discussions between Orange Capital and the Trustees which focused on identifying solutions to what we believe are legal, governance and reputational damages to Partners caused by the Ontario Property Acquisition.

Ron McCowan, Laura Philp and Holyrood

Ron McCowan and Laura Philp, the owner of Holyrood, have been business associates for over twenty-five years. Orange Capital is incredulous that the REIT's Trustees would allow two parties with a long standing and interwoven business relationship to control a combined 35.7% of the REIT with no premium paid or protection offered to minority unitholders.

Examples of the longstanding business dealings between Ron McCowan and Laura Philp include, but are not limited to:

  • The REIT's head office is owned by Laura Philp (via Holyrood) and is actually pledged to a lender in a collateral pool alongside certain properties controlled by Ron McCowan;
  • In 2012, 1865100 Ontario Limited purchased the Crossroads Centre (one of the assets included in the Ontario Property Acquisition). At the time of the purchase, Mr. McCowan was the President, Director & Secretary of 1865100 Ontario Limited. In August 2013, Ms. Philp was named President, Director & Secretary of 1865100 Ontario Limited. In April 2014, pursuant to an amalgamation, 1865100 Ontario Limited changed its name to Holyrood;
  • Laura Philp is listed as an Officer and Treasurer of McCowan & Associates on a recent corporate profile report dated December 11, 2013. The next day, December 12, 2013, Ms. Philp ceased to occupy that role and Mr. McCowan assumed the role of Treasurer, a mere six days before entering into the Ontario Property Acquisition; and
  • In past litigation with lenders, it was disclosed that Mr. McCowan had leased a healthcare facility to Ms. Philp for twenty years with no rent payable. The mortgage on the property went into default and the presiding Judge noted that the lease arrangement was "strange" - despite her position as a tenant, Ms. Philp negotiated with the lender on Mr. McCowans' mortgage payments in arrears.

Orange Capital demands that a forensic investigation be undertaken to determine if Holyrood and its predecessor  series companies are in fact a related party to Mr. McCowan.  In addition, Orange Capital believes that such a review should include whether (a) Holyrood and its present owner, Laura Philp, were acting jointly or in-concert with Ron McCowan and (b) if the Ontario Property Acquisition actually resulted in a change of control of Partners without unitholder knowledge or consent. We are also calling for the investigation to determine what facts the independent Trustees had knowledge of and how they could have possibly concluded to proceed with the Ontario Property Acquisition or the April 30 financing transaction.

If Ron McCowan and Holyrood are deemed to be related parties and/or acting jointly and in concert, Orange Capital believes the new Trustees should take all steps necessary to preserve the rights of the REIT's unitholders. Such steps could include, but are not limited to, taking action under the REIT's unitholder rights plan or pursuing a restructuring or unwinding of the Ontario Property Acquisition.

Orange Capital has a long track-record of seeking improved governance and creating unitholder value in the REIT sector. Orange Capital believes its Proposed Financing including the appointment of new Trustees would restore credibility and protect minority unitholders of Partners.  

Current Independent Trustees of Partners:

1. Marc Charlebois: (416) 697-0199,

2. Kevin VanAmburg: (226) 444-8611,

3. Lindsay Weiss:


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: MEDIA CONTACT: Riyaz Lalani, Bayfield Strategy, Inc., 416-907-9365,,

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Orange Capital, LLC

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