New York REIT,Inc. (NYSE:NYRT) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On February 15, 2017, Gregory F. Hughes, one of the independent
directors of New York REIT, Inc. (the Company), resigned as a
member of the Companys Board of Directors (the Board), effective
immediately. At the time of his resignation, Mr. Hughes was a
member of the Compensation Committee of the Board. In his
resignation letter (the Resignation Letter), Mr. Hughes advised
the Company that he was resigning due to fundamental
disagreements with the Board and the Company relating to its
governance, including: (i) disagreements with the actions
approved by the majority of the directors on the Board, as to
which he cast dissenting votes; (ii) matters related to the
conduct of the Boards request for proposals (the RFP) to select
an external advisor; (iii) practices in connection with meetings
of the Board, including meetings not being held in person, as
well as with minimal notice and no formal agenda; and (iv) the
potential acceleration of the vesting of restricted shares of the
Companys common stock (restricted shares) held by Robert H. Burns
in connection with his resignation from the Board. All
descriptions of the contents of the Resignation Letter set forth
in this Current Report on Form 8-K are qualified in their
entireties by reference to the full text of the Resignation
Letter, a copy of which is attached hereto as Exhibit 17.1 to
this Current Report on Form 8-K.
The Company disagrees with the assertions made by Mr. Hughes in
the Resignation Letter and take exception to Mr. Hughes
characterizations of certain facts and his conclusions.
With respect to Mr. Hughes assertions regarding the RFP process,
the Company notes that the RFP process was initiated prior to Mr.
Hughes joining the Board and believes it has resulted in the best
outcome for the Company and its stockholders. The RFP process
took time to conduct for a variety of reasons that Mr. Hughes did
not address in his Resignation Letter. First, there was not, and
there never was, as Mr. Hughes claims, a hand-picked choice to
become the Companys advisor. Instead, the RFP process involved a
disciplined review of proposals by the independent directors of
the Company, with the advice of independent financial advisors
and legal counsel, which included face-to-face interviews with a
number of potential advisors. Second, the Companys settlement
agreement with WW Investors, LLC, to which Mr. Hughes was elected
to the Board in the first place, provided that Mr. Hughes should
be excluded from any committee formed for the purpose of
evaluating proposals under the RFP. However, in order to give Mr.
Hughes full visibility into the RFP process and to obtain the
benefit of Mr. Hughes views of the qualifications of the various
candidates, the Board allowed Mr. Hughes to participate in the
selection of an advisor on the same basis as each other
independent director.
Mr. Hughes also mischaracterizes the purpose of the RFP process
as replac[ing] AR Globals affiliate. In fact, the purpose of the
process was to enable the Company to execute its plan of
liquidation in the most efficient and cost effective manner
possible. The temporary extension of the Companys advisory
agreement with its current advisor, New York Recovery Advisors,
LLC (the Advisor), was intended to mitigate the risks associated
with transitioning an entire management team on a single day. The
Board believes that structuring the advisory transition to occur
over a three-month period through the filing of the Companys
Annual Report on Form 10-K would allow for a smooth and orderly
transition of day-to-day management to Winthrop REIT Advisors,
LLC (Winthrop) while at the same time permitting Winthrop to
implement the Companys plan of liquidation. Mr. Hughes further
fails to state that a significant factor in this determination
was the belief by a majority of the independent directors that
the failure to extend the term of the Companys existing advisory
agreement could jeopardize the timely filing of the Companys
Annual Report on Form 10-K.
Regarding the Viceroy Hotel asset, in accordance with generally
accepted accounting principles, as a result of the Board’s
approval of the plan of liquidation, the Company decreased the
holding period assumptions regarding its assets, resulting in an
impairment charge for the Viceroy Hotel.
Mr. Hughes is correct that, during his tenure on the Board, the
Board held many meetings that were not held in person. The
Company notes, however that each of those meetings related to
matters that required immediate attention and were always
compliant with the Companys by-laws while attempting to
accommodate the directors personal and professional schedules. In
addition, Mr. Hughes views do not represent the views of a
majority of the Board with respect to governance and process.
Regarding the potential accelerated vesting of restricted shares
following Mr. Burns resignation, the Compensation Committee of
the Board, of which Mr. Hughes was a member, considered this
matter and, following discussion, took no action on the matter.
Accordingly, all unvested restricted shares held by Mr. Burns
that did not automatically vest in accordance with their terms
were forfeited upon his resignation. The Company notes that Mr.
Burns attended 75% of the combined meetings of the Board and the
meetings of committees on which he sat during the year ended
December 31, 2016.
Item 8.01. Other Events.
On February 16, 2017, the Company issued a press release
announcing the resignation or Mr. Hughes, a copy of which is
attached to this Current Report on Form 8-K as Exhibit 99.1 and
is incorporated herein by reference, in which Michael Ashner, a
principal of WW Investors, LLC, which selected Mr. Hughes to join
the Board in October 2016 to a settlement agreement with the
Company, and Winthrop REIT Advisors LLC, commented, While we are
exceedingly grateful to Greg for his efforts in moving NYRT
forward, we retain our confidence that the company will continue
to move forward with its plan of liquidation under the
stewardship of the Board.
Also the Company reports that WW Investors, LLC has a recommended
a replacement board member to the Companys Nominating and
Corporate Governance Committee and that the Companys Nominating
and Corporate Governance Committee is currently evaluating that
candidacy and expects to expeditiously make a determination
whether to recommend that such candidate be elected to the Board.
Forward-Looking Statements
The statements in this press release that are not historical
facts may be forward-looking statements. These forward looking
statements involve substantial risks and uncertainties. Actual
results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking
statements the Company makes. Forward-looking statements may
include, but are not limited to, statements regarding stockholder
liquidity and investment value and returns. The words
anticipates, believes, expects, estimates, projects, plans,
intends, may, will, would, and similar expressions are intended
to identify forward-looking statements, although not all
forward-looking statements contain these identifying words.
Factors that might cause such differences include, but are not
limited to: the impact of current and future regulation; the
impact of credit rating changes; the effects of competition; the
ability to attract, develop and retain executives and other
qualified employees; changes in general economic or market
conditions; the Companys ability to complete asset sales and
realize the results of its plan of liquidation; the timing of and
the amount of proceeds of asset sales; and other factors, many of
which are beyond the Companys control, including other factors
included in Companys reports filed with the SEC, particularly in
the Risk Factors and Managements Discussion and Analysis of
Financial Condition and Results of Operations sections of the
Companys latest Annual Report on Form 10-K for year ended
December 31, 2015, filed with the SEC on February 26, 2016, the
Quarterly Report on Form 10-Q for the quarter ended September 30,
2016 filed with the SEC on November 9, 2016, and the Definitive
Proxy Statement, as such Risk Factors may be updated from time to
time in subsequent reports. The Company does not assume any
obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits |
| Exhibit No. | Description | |
| 17.1 |
Resignation Letter, dated as of February 15, 2017, from Gregory F. Hughes |
|
| 99.1 | Press release dated February 16, 2017 |
About New York REIT, Inc. (NYSE:NYRT)
New York REIT, Inc. is a real estate investment trust. The Company focuses on acquiring and owning office and retail properties in Manhattan. The Company’s business is primarily conducted through New York Recovery Operating Partnership, L.P. The Company owns approximately 20 properties in New York City, which aggregate approximately 3.4 million rentable square feet. The Company holds interests in properties of various types, such as office, retail, hotel, parking and storage. The Company’s properties include Design Center, 416 Washington Street, 50 Varick Street, 1440 Broadway, One Worldwide Plaza, 256 West 38th Street, 229 West 36th Street, 333 West 34th Street, 367-387 Bleecker Street, 33 West 56th Street (garage), 350 West 42nd Street, Foot Locker, Duane Reade and 1100 Kings Highway. New York REIT, Inc. (NYSE:NYRT) Recent Trading Information
New York REIT, Inc. (NYSE:NYRT) closed its last trading session up +0.04 at 9.96 with 1,027,082 shares trading hands.