New YorkREIT's management defended its search for new directors and saidtwo activist investors' desire to both manage the company and serve on itsboard have complicated the process.
The company said in a news release that its board offered"reasonable terms" to Michael Ashner and Steven Witkoff, co-owners ofWW Investors, proposing to include them on the company's proxy statement to beelected to the board and allowing them to attend all board meetings andparticipate as observers before the vote is held.
Ashner and Witkoff criticized the process in a Sept. 29 news release,arguing that the appointment of an outside search firm to recruit new companydirectors was a slight toward their firm's own slate of nominees, whichincludes themselves.
In response, the company said Ashner and Witkoff"should be willing to stand for election by the stockholders with theother directors," and said WW Investors' stated desire to take overmanagement of the REIT presents a potential conflict with the investors' bidfor board seats.
"This inherent conflict between Messrs. Ashner andWitkoff's desire to be independent board members while at the same time biddingfor the management contract, significantly affected the settlementnegotiations," the company said.
The company added that, contrary to Ashner and Witkoff'saccount, it "remains open to discussing" reimbursement of WWInvestors' out-of-pocket third-party expenses if such a move is approved byshareholders.
The company added that it is "in the process of puttingin place a new financing" that will give it additional flexibility toimplement its plan of liquidation.
In its earlier strategic review, the company did not receiveany firm and actionable offers that exceeded $11 per share, though there werenon-binding indications of interest in that range, the company said.
One such proposal, by Ashner and Witkoff, "wasconditioned on WW Investors becoming the external advisor and propertymanager" of the REIT, the company added.