ARC’s New York REIT Announces Plan of Liquidation and Dissolution
The board of New York REIT Inc. (NYSE: NYRT), a former non-traded real estate investment trust known as American Realty Capital New York Recovery REIT, has approved a plan of complete liquidation and dissolution of the company, which must be approved by the stockholders. The company also amended its credit facility, which originally included a restriction prohibiting it from contemplating a plan of liquidation. The net proceeds from the sale are expected to be between $8.73 and $11.50 per share.
Earlier this month, the REIT canceled its proposed merger with private real estate firm, JBG Companies. The proposal was heavily criticized by a number of shareholders including WW Investors, an entity jointly owned by Michael Ashner and Steven Witkoff, who own a combined 1.2 million shares of NYRT stock.
Ashner, the chairman and chief executive officer of Winthrop Realty Trust, and Witkoff, the chairman and chief executive officer of The Witkoff Group, submitted two investor presentations detailing their grievances with the proposed merger, which they viewed as more profitable for company insiders than REIT stockholders. The pair also intend to file preliminary proxy materials with the SEC to solicit votes to elect five director nominees, including themselves, to the board.
The REIT intends to hold a special meeting of stockholders to seek approval of the plan and expects to file preliminary proxy materials with the Securities and Exchange Commission in the near future. If approved, the company will attempt to convert all of its assets into cash, resolve its remaining liabilities and obligations, file articles of dissolution, and then delist from the NYSE.
Throughout the strategic process, the company engaged with a number of potential buyers who were interested in acquiring individual properties. The company said it is re-engaging in those discussions and seeking other qualified buyers as well, however, if at any time the company receives a better offer for a corporate transaction, the liquidation plan can be abandoned.
“This plan of liquidation is the next logical step in our previously announced plan to sell the assets of the company and distribute the net proceeds to our stockholders,” said Randolph Read, chairman of the board of NYRT. “There are advantages in a formal plan of liquidation for completing the monetization of the company’s assets, and that is why the board has taken this action. Our stockholders have expressed their support for our plan to sell assets and this plan of liquidation will allow us to accomplish that task in the most efficient manner.”
The board, which approved the liquidation plan in a 5-to-1 vote, will continue to evaluate the company’s monthly dividend on a month-by-month basis as it has done in the past.
New York REIT is a publicly traded real estate investment trust that owns office and retail properties in New York City. NYRT stock closed at $9.81 on Monday.
