The activist Land & Buildings Investment Management LLC lobbed another critical missive at Taubman Centers Inc.'s leadership, this time taking aim at the Taubman family's large stake in the company's preferred stock and the threat it could pose to the company's REIT status.

In the letter to the company's audit committee, dated Dec. 6 and released publicly in a separate Dec. 13 letter to shareholders, Jonathan Litt, Land & Buildings' founder and chief investment officer, urged the body to engage independent advisers to ensure the board enforces the 8.23% ownership limit of the value of the company's capital stock, as set forth in the company charter, to protect common shareholders' interest and the company's REIT status.

Litt said the Taubman family's 25 million shares of series B preferred stock equates to 30% of the company's voting stock and likely represents a violation of the company's charter. Overall, the family owns "well over 40%" of the company's capital stock, including its common and preferred stock holdings, he said.

The activist put forth a hypothetical buyout scenario where a well-capitalized investor made a public or private offer this year to buy the company at $3.5 billion for the series B preferred Stock and $85 per common share, conditional upon the approval of the preferred shares held by the Taubman family. Such an offer, Litt said, whether or not the Taubman family accepted it, would establish the value of the preferred stock, and the Taubman family's ownership level at that juncture would be deemed to be excessive, according to REIT rules that establish that no five shareholders can own in excess of 50% of a REIT's value.

Litt also said the Taubman family may have failed to make adequate disclosures related to its ownership level.

"We urge the Audit Committee's Independent Board Members to immediately hire independent advisors separate from both the Taubman Family's and the Company's advisors to insure an unbiased assessment of these issue," Litt said in the letter.