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Altisource rejects shareholder group's 'misguided' claims in letter to stockholders

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Altisource rejects shareholder group's 'misguided' claims in letter to stockholders

Altisource ResidentialCorp. issued a letter to stockholders rejecting accusations made by a shareholder group against the company'scurrent board makeup and external-management structure, calling the claims "misguidedand self-serving."

"In its attempt to gain control of the board, RESI ShareholdersGroup has launched a proxy fight based on false claims about Residential and misrepresentationsabout the way your board and management operate the company," Altisource wrote,referring to the activists, who have nominated their own slate of director candidatesfor election at the company's June 1 shareholder meeting. "We are writing toset the record straight regarding RESI Shareholders Group's misguided and self-servingclaims."

The shareholder group has claimed that Altisource's board operatesthe REIT in a way that primarily benefits Altisource Asset Management Corp., thecompany's external manager, and AltisourcePortfolio Solutions SA, its external services provider.

In its letter, the single-family REIT hit back at RESI ShareholdersGroup's "misrepresentations, inaccurate data, and flawed analyses."

Altisource said that the group's claim that its board is "conflictedand unqualified" is not true. Rather, the company said, the board comprisesdirectors who have "broad and diverse" experience and exhibit "independent"leadership and oversight. Altisource added that its four independent directors haveno economic interests in or business ties with its main service providers or theirinvestors, contrary to the shareholder group's assertions.

The company also noted that its directors played a key role innegotiating a new asset management agreement between the REIT and Altisource AssetManagement that delivers "significantly lowered" fees. The REIT furthersaid that Altisource Portfolio Solutions offers its services at "market-competitive"prices.

By contrast, Altisource argued, the shareholder group's directornominees lack understandingof the REIT's business model. Aside from mischaracterizing the REIT's strategicties with its external manager and external services provider, the investor groupalso has no intention of creating shareholder value, and their campaign for theREIT's liquidation is in fact value destructive,Altisource added.

Accordingly, Altisource called on its shareholders to vote forits slate of five director nominees at the upcoming meeting.