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Vote to end dual-share structure a 'transformation point,' Forest City CEO says


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Vote to end dual-share structure a 'transformation point,' Forest City CEO says

Forest City Realty Trust Inc. 's leadership on June 6 said all cards were on the table in its play to simplify its business model and improve its corporate governance.

"I would hope that the evidence supports the fact that we are embracing change, that we are acting on that need to make change, and having very positive results in the process," president and CEO David LaRue said during a company presentation at REITWeek in New York Forest City's second appearance as a REIT at the annual conference since converting in early 2016.

Forest City in recent months has come under attack by the activist Land & Buildings Investment Management LLC for alleged self-dealing, poor corporate governance and mismanagement, as well for the perceived lack of independence of its new director nominees. LaRue was asked about the activist campaign during the presentation, but he did not reference Land & Buildings or its founder and chief investment officer, Jonathan Litt, by name.

At the company's annual stockholder meetingJune 9, Forest City shareholders will vote on the plan to collapse the company's dual-class share structure, another target of criticism. LaRue touted the vote as a key "transformation point" in the company's ongoing evolution.

"Based upon where the different stocks are trading, it appears that it will pass," he said. "It's the right time, both for the company and the shareholders."

Forest City, meanwhile, is still working to offload its retail portfolio. The company is edging toward definitive documentation for two separate planned transactions, one involving the company's urban retail properties and another involving its regional mall portfolio, LaRue said.

"The risk, always at this point in any real estate deal, is getting to close," he said. "We do have ... the business terms worked out. We're moving forward. The retail environment is one [where] everyday there's more bad news. But as we look at the quality of the portfolio ... we are still confident in [our] being able to execute that."