RMR's contract renewed. First sentence of 8-K filing below.
I have to wonder what due diligence was done before making this decision to renew. Do the Portnoys get to vote on it? Was RMR evaluated as doing a good job? Who did the evaluation of RMR's performance? What a rank conflict of interest.
On December 11, 2012, CommonWealth REIT, or the Company, entered into an amended and restated business management agreement, or the business management agreement, with Reit Management & Research LLC, or Reit Management. The business management agreement amended and restated the preexisting amended and restated business management agreement, as amended, or the prior business management agreement, between the Company and Reit Management. The business management agreement continues until December 31, 2013 and automatically renews for successive one year terms annually thereafter unless notice of non-renewal is given by the Company or Reit Management before the end of an applicable term.
This has been going on for ten plus years,you either accept or bail. It isn't going to change and its legal.
What we want to see is sales of properties that are non preforming. As much as everyone has beat on RMR a couple 100m of properties have been written down and are on the block for whatever they can get.
Dumping the dogs cost RMR a lot of fees but saves CWH a lot of money
Fritz, you say the usual way of doing business is legal, but how would you know? There are significant hurdles to initiating even perfectly valid lawsuits. Many questionable practices at many firms simply elude legal examination for this reason.
Presumably the contract was renewed after something more casual than the decision of what type of doughnuts to order for the meeting. There must at least be a written report assessing the utility and value of the RMR contract. Who wrote it? What does it say? Was there arm's length negotiating? It is curious because obviously RMR has done a poor job. Obviously most everyone involved in the decision to renew the contract is compromised by ties to RMR.
So far I have not seem CWH dumping a lot of dogs. It would be good of course if they could streamline the business model.