![]() Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) (Former name or former address, if changed sinceįorm 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: (Address, including zip code, of Principal (Exact Name of Registrant as Specified in As of October 2017, there were approximately 104.8 million shares of AFIN common stock outstanding.Ĭlick here to visit The DI Wire directory page.Date of Report (Date of earliest event reported): Clair-Hibbard, and potentially hundreds of other individual and entity shareholders. The complaint was submitted by attorney, Olimpio Lee Squitieri of Squitieri & Fearon, LLP and seeks a class action lawsuit on behalf of the plaintiff, Carolyn St. All critical to AFIN’s current level of dividends and stock redemptions at the time. They failed to disclose that they wrote down the value of its SunTrust properties by $24.7 million for “impairment changes.”Īnd they failed to disclose adverse information regarding a drastic decline in AFIN’s NAV, asset impairments and dramatic declines in the flow of funds from operations. ![]() It omitted that its stockholders’ equity dropped 15 percent in 2016.Īccording to the lawsuit, Schorsch and his fellow defendants also failed to disclose the sale of Merrill Lynch properties for a price of $148 million, on January 31, 2017, at a loss of nearly $17.5 million. It omitted the eminent termination of its share repurchase program, thereby leaving no liquidity option for shareholders. It omitted that its cashflow declined by more than $16 million between 2015-2016. Schorsch and Kahane omitted AFIN’s rationale for not listing its stock on either the NYSE or NASDAQ despite securing listing approvals by both. Though AFIN introduced its IPO on Jon the NASDAQ, shareholders grew frustrated by proxy materials that made repeated references to the liquidity that would be created through a public listing on the New York Stock Exchange between 2015-2017.Īs another carrot to solicit shareholder votes, AFIN proxy statements on February 9, 2017, disclosed the company, “intends to list the stock upon the closing of the merger.” Further reducing shareholder value and liquidity, while undermining a potential public listing, this advisory agreement discouraged any potential takeover with a $125-million internalization fee that would accompany any buyout. ![]() Though AFIN initially suggested investors would be presented a path to liquidity by its sixth year, this was amended by the third advisory agreement. ![]() Proxy statements suggested the merger “would create a fee structure with a lower base management fee as a percentage of combined assets and cost efficiencies, which would contribute to stronger dividend, enhanced liquidity and operating flexibility.” In actuality, per the lawsuit, it created a vehicle to roll up all of its affiliated non-traded public REITS into AFIN and another AR Global affiliate in order to garner unfair and above-market fees through 20-year non-cancellable advisory agreements. Yet, the legal complaint alleges the abandonment of these investment objectives and that, in lieu of Schorsch and Kahane’s fiduciary duties, the two systematically usurped shareholders’ rights to make informed decisions by providing inaccurate and misleading proxy statements.Īs a result, the suit seeks to recover damages and rescind the merger between AFIN and Retail Centers of America (RCA) as well as a second amended advisory agreement, and a third non-cancellable advisory agreement, which the plaintiffs allege has erased stockholders’ share value and liquidity. ![]()
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