Details Voting Intentions and Reasons Why There Is Urgency to Add Two Independent Preferred Stock Trustees to the Board
ATLANTA, July 7, 2022 /PRNewswire/ -- Cygnus Capital, Inc. (together with its affiliates, "Cygnus"), a significant and long-term shareholder of beneficial interests and preferred shares of Pennsylvania Real Estate Investment Trust (NYSE:PEI) ("PEI" or the "Trust"), today issued a statement regarding Cygnus' voting intentions with respect to the 2022 Annual Meeting of Shareholders, originally held on June 2, 2022, and adjourned to 11:00 a.m. Eastern Time on August 2, 2022 (the "Annual Meeting").
Holders of record as of the close of business on April 11, 2022, the record date for the Annual Meeting, of PEI's 7.375% Series B Cumulative Redeemable Perpetual Preferred Shares, 7.20% Series C Cumulative Redeemable Perpetual Preferred Shares and 6.875% Series D Cumulative Redeemable Perpetual Preferred Shares (collectively, the "Preferred Shares") have the right to elect two trustees (the "Preferred Trustees") to PEI's Board of Trustees (the "Board") since the Trust has not paid cash dividends on its outstanding preferred shares for six quarters. The only item on the agenda for the reconvened Annual Meeting is the election of the Preferred Trustees.
Cygnus has nominated Christopher Swann, and Kenneth Hart has nominated himself, for election to serve as the Preferred Trustees at the Annual Meeting. Each of Messrs. Swann and Hart will be elected as Preferred Trustees by a plurality of the votes cast.
Cygnus believes that a quorum, as defined in the Trust's governing documents, was achieved at the originally convened June 2, 2022 date of the Annual Meeting. Unfortunately, PEI has adopted a position which Cygnus believes is inconsistent with the plain language set forth in the Trust's governing documents, asserting that a majority of the outstanding Preferred Shares is needed to constitute a quorum before the proposal to elect Messrs. Swann and Hart as Preferred Trustees can be considered. Cygnus has repeatedly raised to the Trust's management that its interpretation of the quorum requirement has deprived holders of Preferred Shares of the Board representation to which they are entitled. Cygnus has also expressed grave concerns regarding the minimal effort being spent by the Trust to achieve this purported quorum requirement.
While Cygnus disagrees with the Trust's position, Cygnus is nonetheless taking this opportunity to inform holders of Preferred Shares of their right to representation on the Board and to make clear its voting intentions with respect to the Annual Meeting.
We intend to vote "FOR" the election of Messrs. Swann and Hart as Preferred Trustees because Cygnus believes PEI has a limited window to put its financial affairs in order and representation on the Board by holders of Preferred Shares is a necessary and important step in that process. PEI has significant near term debt maturities that must be addressed in order to protect the economic interests of shareholders. Specifically, progress must be made in meeting the debt covenants under the Fashion District Partnership Loan Agreement as well PEI's other credit agreements which have deadlines in January 2023 and December 2022, respectively. Holders of the Preferred Shares are entitled to representation as these deadlines loom. Cygnus believes the Preferred Trustees have the requisite skillsets and owner mindset to add significant value to the Board during these difficult times.
Cygnus is an integrated real estate investment and alternative asset management company focused on opportunistic, special situation, and distressed real estate investments. Cygnus targets long term, absolute returns for investors by applying a differentiated approach to real estate investing. By placing an emphasis on the acquisition, workout, and disposition of real estate debt assets characterized by their complexity, inefficiency, and niche qualities, Cygnus is able to target superior, absolute returns for its investors.
Cygnus Capital, Inc.
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SOURCE Cygnus Capital, Inc.