TORONTO, March 22, 2016 /CNW/ - FrontFour Capital Group LLC, FrontFour Capital Corp., Concerned MIC Shareholders GP Inc., Performance Income Inc. and Windsor Private Capital Inc., as managers and/or general partners of certain funds and limited partnerships (collectively the "Concerned Shareholder Group"), owning directly or indirectly approximately 8% of the issued and outstanding Class A common shares (the "Common Shares") of Trez Capital Mortgage Investment Corporation ("Trez Capital" or the "Company") (TSX:TZZ), commented today on the Company's press release dated March 9, 2016.
The Company's press release simply serves to underscore shareholders' ongoing concern with the independence of the Special Committee and the strategic review process to date.
In this particular press release, the Special Committee has chosen to:
- give the external manager, Trez Capital Fund Management Limited Partnership (the "Manager") a platform to negotiate the termination or amendment of its contract by allowing the Manager to publicly state its position;
- disclose that the Special Committee will only communicate its conclusions on this matter in proxy materials to be circulated later (which we believe means that the Special Committee has either not reached a conclusion on this very important matter, six months into its process, or has chosen to create confusion among shareholders to benefit the Manager); and
- question the value of the Company's portfolio in a wind-up scenario while simultaneously soliciting bids for the mortgage portfolio – messaging that is both unexplained and contrary to the Company's published views of the portfolio's fair value.
This is highly concerning as the Board of Trez Capital is obligated to represent the best interests of Trez Capital, not those of the external Manager.
Despite the confusion that has been created by the current board's meandering strategic alternatives process and its public statements, the Concerned Shareholder Group wishes to remind shareholders of the following:
As per Section 5.1(a)(iii) of the Management Agreement dated as of November 30, 2013 between the Company and the Manager (the "Management Agreement") no termination fee is payable upon wind-up of the Company approved by a special resolution of shareholders. Consequently, if the Company is wound-up as a result of a special resolution approved by shareholders, NO termination fees will be owed to the Manager. The Management Agreement is available at www.sedar.com for all shareholders to review.
As described in our press release dated March 3, 2016, the Concerned Shareholder Group believes the recently announced monetization process faces a number of significant challenges which will make it difficult to achieve an acceptable outcome for shareholders when compared to the wind-up alternative put forward by the Concerned Shareholder Group. At this time, the members of the Concerned Shareholder Group wish to reiterate that they will not support any transaction which enriches the Manager at the expense of shareholder value unless the transaction results in shareholders receiving net proceeds that approximate the current book value per share.
In light of the upcoming annual and special meeting of shareholders requisitioned by the Concerned Shareholder Group, we have given notice to the Special Committee that we will hold its members responsible for any wasteful endeavors or transactions, including the payment of any unnecessary fee to the Manager, as well as any failure to act in the best interests of the Company.
The Concerned Shareholder Group has retained Kingsdale Shareholder Services as its strategic advisor and proxy solicitor to assist with its upcoming solicitation of shareholders in connection with the Annual and Special Meeting of Trez Capital to be held on May 30, 2016.
For further information contact Zachary George at FrontFour Capital Group LLC – (203) 274-9053.
About FrontFour Capital Corp.:
FrontFour Capital Corp., located at 140 Yonge Street, Suite 305, Toronto, ON M5C 1X6, was formed in January 2011 and is incorporated in British Columbia. FrontFour Capital Corp. is registered with the Ontario Securities Commission as an Investment Fund Manager, Portfolio Manager and Exempt Market Dealer.
FrontFour Capital Group LLC:
FrontFour Capital Group LLC, located in the United States at 35 Mason Street, Greenwich, CT 06830, was formed in December 2006. FrontFour Capital Group LLC is registered with the Securities & Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended.
About Concerned MIC Shareholders GP Inc.:
Concerned MIC Shareholders GP Inc., the General Partner of Concerned MIC Shareholders Fund, is a corporation incorporated under the laws of the Province of British Columbia.
About Windsor Private Capital Inc.:
Windsor Private Capital Inc., the General Partner of Windsor Private Capital Limited Partnership, is a corporation incorporated under the laws of the Province of Ontario and is located at 28 Hazelton Ave., Suite #200, Toronto M5R 2E2.
About Performance Income Inc.:
Performance Income Inc., the General Partner of Performance Balanced Fund, is a corporation incorporated under the laws of the Province of Ontario and is located at 28 Hazelton Ave., Suite #200, Toronto M5R 2E2.
The information contained in this press release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable securities laws. Although the requisitioned meeting of shareholders has been scheduled to take place on May 30, 2016 (the "Meeting"), shareholders are not being asked at this time to execute a proxy in favour of the Concerned Shareholder Group's director nominees (the "Concerned Shareholder Nominees") or the wind-up resolution set forth in the requisition. In connection with the Meeting, the Concerned Shareholder Group intends to file a dissident information circular (the "Information Circular") in due course in compliance with applicable securities laws.
Notwithstanding the foregoing, the Concerned Shareholder Group is voluntarily providing the disclosure required under section 9.2(4) of National Instrument 51-102 – Continuous Disclosure Obligations in accordance with securities laws applicable to public broadcast solicitations.
This press release and any solicitation made by the Concerned Shareholder Group in advance of the Meeting is, or will be, as applicable, made by the Concerned Shareholder Group, and not by or on behalf of the management of Trez Capital. All costs incurred for any solicitation will be borne by the Concerned Shareholder Group, provided that, subject to applicable law, the Concerned Shareholder Group may seek reimbursement from Trez Capital of the Concerned Shareholder Group's out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection with a successful reconstitution of the Board.
The Concerned Shareholder Group is not soliciting proxies in connection with the Meeting at this time, and shareholders are not being asked at this time to execute proxies in favour of the Concerned Shareholder Nominees (in respect of the Meeting) or any other resolution set forth in the requisition. Any proxies solicited by the Concerned Shareholder Group will be solicited pursuant to the Information Circular sent to shareholders of Trez Capital after which solicitations may be made by or on behalf of the Concerned Shareholder Group, by mail, telephone, fax, email or other electronic means, and in person by directors, officers and employees of the Concerned Shareholder Group or any proxy advisor that the Concerned Shareholder Group may retain or by the Concerned Shareholder Nominees.
Any proxies solicited by the Concerned Shareholder Group in connection with the Meeting may be revoked by instrument in writing by the shareholder giving the proxy or by its duly authorized officer or attorney, or in any other manner permitted by law and the articles of Trez Capital. None of the Concerned Shareholder Group or, to its knowledge, any of its associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter proposed to be acted on at the Meeting, other than the election of directors to the Board.
Additional information concerning the Concerned Shareholder Nominees is contained in the press release of the Concerned Shareholder Group dated February 8, 2016, a copy of which may be obtained on Trez Capital's SEDAR profile at www.sedar.com.
Trez Capital's principal business office is 1550-1185 West Georgia Street, Vancouver, British Columbia V6E 4E6.
SOURCE Concerned Shareholder Group of Trez Capital Mortgage Investment Corporation
For further information: For further information contact Zachary George at FrontFour Capital Group LLC - (203) 274-9053.