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Wheeler Real Estate Investment Trust, Inc. (WHLR)

NasdaqCM - NasdaqCM Real Time Price. Currency in USD
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2.6200-0.1200 (-4.38%)
As of 9:30AM EDT. Market open.
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  • D
    Dave
    13D is interesting.
    Keep the Notes, but pay me the $6-8 in accrued dividends. Actually vitiates the upcoming proposal, as the B shares' accrued dividends became "payable" upon the distribution of the rights.
  • J
    Just Me
    13D I knew it was coming…”Mr. Joseph Stillwell
    Chairman of the Board of Directors Wheeler Real Estate Investment Trust, Inc. 2529 Virginia Beach Boulevard
    Virginia Beach, VA 23452
    VIA OVERNIGHT COURIER Dear Mr. Stillwell:
    We are owners of Series B Convertible Preferred Stock (“Series B”) of Wheeler Real Estate Investment Trust, Inc. (“Wheeler”) and Series D Cumulative Convertible Preferred Stock (“Series D”) of Wheeler. As you know, since October 15, 2018 dividends on the Series B and Series D have accrued and accumulated on a quarterly basis without be paid.
    Wheeler’s governing documents impose restrictions on Wheeler when there are accrued but unpaid dividends on the Series B or Series D. Those restrictions include, but are not limited to, a prohibition on distributions of property to junior shareholders. Wheeler’s recent distribution of rights and notes in the face of unpaid dividends to the Series B and D shareholders, is an egregious breach of the restrictions in its governing documents and violation of the rights of its Series B and Series D shareholders.
    As a result of Wheeler’s breach, all accrued and unpaid dividends accruing on or before July 15, 2021 with respect to Series B and Series D became immediately due and payable.
    Accordingly, we respectfully request that Wheeler immediately pay all accrued and unpaid dividends accruing on or before July 15, 2021 with respect to Series B and Series D.
    In addition, the Amendments to Terms of Series B Preferred Stock (Proposal 2), which purport to deprive Series B shareholders of their right to accrued dividends, will be under consideration by the stockholders at the Special Meeting of Common Stockholders to be held November 3, 2021. As the Series B shareholders have a vested right to those dividends, we respectfully request that Wheeler withdraw Proposal 2 from consideration.
    Consequently, please be advised that if Wheeler does not promptly take the actions described above we will have no alternative other than to file suit and seek all available remedies, including injunctive relief. We confess that we are disappointed that Wheeler’s actions have brought us to this pass and, while we of necessity reserve the right to take such further action as we deem prudent, we hope that this situation can be brought to a speedy and amicable resolution and Wheeler can once again resume regular payment of dividends.
    Sincerely,
    STEAMBOAT CAPITAL PARTNERS MASTER FUND, LP STEAMBOAT CAPITAL PARTNERS II, LP
  • B
    Bigbadwolfe
    The moment of truth is fast approaching. My opinion is the best potential bang for your buck is in the B shares which I think will bring in something north of $19. Do your own due diligence.
    Bullish
  • B
    Bigbadwolfe
    I’m guessing the company will offer a combination of cash and and common for WHLRP rather than risk multiple lawsuits and big delays. Something north of $19.
    Bullish
  • g
    gtw
    Articles about the rights to amend. Two are old, but very much on the issue, and still relevant. The other is more recent. Yahoo will not you post a URL so I will give phrases that will enable you to search find the articles.

    I will give my interpretation of all this later. Off on a trip today.

    hanks comparison of the principal provisions
    the problem of funding accrued dividends in Maryland
    hanks jr. major issues in REIT preferred stock terms
  • J
    Just Me
    Total mv of prefs trading at only 55m for d AND b ..one would think they would be all over using that 50m raised to buy it back
  • C
    Chad
    I am reading through the proxy statement now regarding the special common stockholder meeting. On the 72/73rd page of the pdf (page F-16 and F-17 in the document) it says that upon a default of preferred dividends for 6 or more quarters (which happened on April 15, 2020), the preferred shareholders have a right to vote to elect 2 directors to the board..... anybody else see this? The only catch is that 20% of the combined series preferred shareholders must propose this. I am a small holder of the series B pref. Does anybody think we have a chance of getting 20% of these classes together through some sort of social media? I think that it's obvious the preferred shareholders should have representation on the board, given the shenanigans the common is now trying to force upon the preferred.
  • g
    gtw
    Making sense of the JCP lawsuit.

    5/3/18 an amendment was adopted by Wheeler to terms of the "D" preferred. New language is: "If the Corporation fails to maintain asset coverage of at least 200% calculated by determining the percentage value of (i) the Corporation’s total assets plus accumulated depreciation and accumulated amortization minus the Corporation’s total liabilities and indebtedness as reported in the Corporation’s financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) in proportion to the "aggregate liquidation preference" [then redemption of "D" shares can be demanded]."

    The component of "plus accumulated amortization" was added to the top line, making the 200% coverage easier to obtain. Certainly this component might have been included originally, but it was not. WHLR just decided to add it by amendment to get off the hook. If all along it was the intent to have this term in there they could have sued their attorneys for malpractice for the error of omission. Or it could be that they came up with this amendment as a contrivance to avoid the consequences for poor performance.

    JCP filed a lawsuit on June 28, 2018. In February 2020, the parties reached a settlement and JCP dismissed the lawsuit without prejudice. Apparently the settlement did not hold and JCP filed suit again, apparently in early 2021.

    I wonder if the same attorneys who perhaps messed up the original terms of the "D" are not involved now in all these amendments. It keeps the flashlight beam off of them.

    And it seems that once they got the idea that an amendment a year can make the pesky preferred shareholders go away, they have gone wholesale wild in trying to undermine the rights of the "B" shareholders. It might also be that the unpaid "B" dividends affect the 200% coverage calculation. Make that liability at least seem to go away and the ratio is better.

    Management probably could settle this. Offer $5 and 5 shares of WHLR per WHLRD share and start crawling out of the hole. But management and maybe its attorneys have painted themselves into a corner, so who knows how this will shake out.

    Thank goodness that JANAF is probably worth a good deal more than it is carried on the books for.
  • J
    Just Me
    “the McQuillen case holds that removing accrued dividends may not legally be accomplished by charter amendment . Destruction of rights to accrued dividends alters considerably the contract the preferred stockholder originally made. Hence the Court would be justified in protecting against forcible deprivation of this right by charter amendment which offers no compensation for the lost right”
  • J
    Just Me
    @gtw it’s clear as day in the prospectus “Dividends. Holders of Series B Preferred Stock are entitled to receive, when and as authorized by our board of directors and declared by us out of legally available funds, cumulative cash dividends on each share of Series B Preferred Stock at an annual rate of nine percent (9%) of the Stated Value. Dividends on each share of Series B Preferred Stock will begin accruing on, and will be CUMULATIVE from, the date of issuance. We expect to continue to pay dividends on the Series B Preferred Stock quarterly, unless our results of operations, our general financing conditions, general economic conditions, applicable provisions of Maryland law or other factors make it imprudent to do so. We also expect to continue to authorize and declare dividends on the shares of Series B Preferred Stock on a quarterly basis payable quarterly in arrears on or before the fifteenth day of each January, April, July and October of each year (or the next business day if the      day is not a business day). The timing and amount of such dividends will be determined by our board of directors, in its sole discretion, and may vary from time to time.
  • J
    Just Me
    Regardless of the “vote” not sure why B is trading so low PAR IS STILL 25
  • J
    Just Me
    14A ok read the 130 pages.. I see where they can strengthen the financials , increase AFFO, EPS “restate financials” by eliminating pref accrued ..but so what? What really does it do? Nobody’s expecting to get the 35 total due, heck nobody expects par 25…. Maybe attract better terms on borrowings? Once again they are circling the problem but not directly dealing with it .. time for a final comprehensive tender for A B and D offering cash and stock (and if needed add new bonds to the mix) to “fix” it once and for all
  • J
    Just Me
    How does 16k B shares trade without price only moving a few pennies?
  • J
    Just Me
    Wonder how the big vote went.. assume it passed (again w the b at 10 when par is 25 who cares about additional accrued interest
  • g
    gtw
    About the amendment proposal:

    A class of shareholders has to approve an amendment to terms of its class, even without it being so said in the indenture. For instance, California Corporate Code section 903(a)(4). This provides that not only do the preferred shareholders have to approve, but so do the common. 903(c).

    Management is putting the matter to common shareholders without having first got the approval of the preferred shareholders. Maybe they are in touch with large holders of the "B" and think they can get 50% of the B shares to vote for such a proposal. Maybe the "A" shareholders are on board. Hard to say. Or maybe they are playing a weird game.

    Overall it makes me feel like Mr. Jon Wheeler was still running the show.
  • J
    Just Me
    It’s time stop worrying about PIK interest (we will never see it) focus on math (the sky is not falling) and on all the current cash available. (I’m rounding and memory so pls correct me ) 2m B and 3m D or 5m total prefs outstanding. They already bought back 6m worth D (plus small private buy) or 500k shares. Net 2.5m D now . A successful tender of 18ps that’s 45m for ALL the D (if they need toss in $2 common so be it) they raised 30m plus have 20m unused line total 50m plus unrestricted cash on BS of 8m . Total 58m (plus they have 15m restricted cash) . Cash flow is 1- 1.5m a month. They can use the remaining 13m (from 58) now to buy 850k shares of B leaving just 1.150 m shares . At 15ps that’s only 17m problem. They could easily restart that b pref, wait to raise 17m more of bonds , chip away each month w cash flow, or just issue 5m shares common and poof problem solved ..
  • T
    TD
    7.00% Senior Subordinated Convertible Notes due 2031:
    $27,807,525 Subscriptions & Oversubscriptions
    $2,192,475 Backstop Parties
    -------------------
    $30,000,000 Total
    $24,999,875 Stilwell (83.3% of total offering, 89.9% of Subscriptions & Oversubscriptions)

    Might as well change the name to Stilwell Real Estate Investment Trust, Inc.
  • J
    Just Me
    @jon few problems .. nowhere does it state they can change it, also this is bad faith and unfair dealings… “Under Virginia law, a general partner of a Virginia limited partnership has fiduciary duties of loyalty and care to the partnership and its partners and must discharge its duties and exercise its rights as general partner under the Partnership Agreement or Virginia law consistently with the obligation of good faith and fair dealing”
  • J
    Just Me
    At the end of the day this is all smoke and mirrors.. we were never going to see accrued div anyway so who cares about cumulative div ..”STATED VALUE” (par) is $25
  • J
    Just Me
    I know all the risks but under 10 is a buy in my book…
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