Implores UDF IV Board to Postpone March 4 Special Meeting for One Month to Engage
with NexPoint and Appropriately Evaluate Proposal
NexPoint Will Not Vote at Special Meeting Without
Due Consideration of Proposal
DALLAS, Feb. 27,
2025 /PRNewswire/ -- NexPoint Advisors, L.P.
(together with its affiliates "NexPoint") today announced NexPoint
Real Estate Opportunities, LLC has submitted a competing proposal
to the Board of Trustees of United Development Funding IV ("UDF IV"
or "the Trust") ahead of the Special Meeting of UDF IV Shareholders
(the "Meeting"), scheduled for March 4, 2025, to vote on the
proposed merger of UDF IV with Ready Capital (NYSE: RC) (the
"Ready Merger").
The confidential proposal submitted by NexPoint mirrors many
elements of the Ready Merger but provides shareholders with
superior economic terms, including enhanced balance sheet
distributions, full entitlement to Contingent Value Rights ("CVR")
loan proceeds, and potentially large indemnification
reimbursements. Specifically, NexPoint's offer contemplates balance
sheet distributions that it believes will provide shareholders with
a higher pre-closing dividend than the Ready Merger. Shareholders
would also receive 100% of the net principal and interest recovered
on the CVR loans. By comparison, the Ready Merger entitles Ready
Capital to 100% of the CVR loan proceeds until it has recovered
$13.3 million net, and thereafter
shareholders only receive credit for 60% of additional net
recoveries, which UDF IV estimates to be as much as $20 million. Additionally, NexPoint proposes to
cease further indemnification payments for the imprisoned
management team and recipients of the improper indemnity payments
associated with the SEC disgorgement and intends to recover those
improperly advanced legal fees and indemnity payments, with 100% of
net recoveries being distributed to shareholders.
In connection with the proposal, NexPoint provided the following
comment:
"Given the indefensible lack of engagement by the UDF IV Board
with one of its largest shareholders, NexPoint will not vote at the
March 4 Special Meeting on the
proposed Ready Capital transaction. We implore UDF IV to postpone
the Meeting by one month to properly evaluate our superior
proposal, which offers a better economic outcome for shareholders
and would finally end the litany of governance failures at UDF IV,
including fraud, disclosure
violations, poor performance, and persistent illiquidity. We urge
the UDF IV Board to give our proposal full consideration consistent
with its fiduciary duty, and we hope to engage in meaningful
discussions expeditiously."
NexPoint asks shareholders to take no voting action until
the UDF IV Board has fully assessed NexPoint's proposal and engaged
meaningfully in discussions with NexPoint and encourages the Board
to postpone the upcoming Special Meeting regarding the proposed
Ready Merger until it has had the opportunity to do so.
Shareholders who have already cast their vote may withdraw their
vote by reaching out to their broker.
For More Information:
NexPoint encourages shareholders to
visit udfaccountability.com for more information.
Shareholders can complete the contact form on the site to receive
ongoing updates about UDF IV, the Ready Merger, and any competing
proposals.
About NexPoint
NexPoint Real Estate Opportunities, LLC is a wholly owned
subsidiary of NexPoint Diversified Real Estate Trust, Inc.
(NYSE: NXDT), a diversified real estate investment
trust externally advised by an affiliate of NexPoint Advisors,
L.P.
NexPoint Advisors, L.P. is an SEC-registered adviser on the
NexPoint alternative investment platform. For more information
visit www.nexpoint.com
IMPORTANT INFORMATION
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements include statements regarding
NexPoint's beliefs about the ultimate amount of any pre-closing
dividend and other economic consequences of the proposed
transaction for UDF IV's shareholders and other statements
identified by words such as "expect," "intend," "believe," the
negative version of these words and similar expressions that do not
relate solely to historical matters. Forward-looking statements are
based on NXDT's current expectations and assumptions regarding
capital market conditions, NXDT's business, the economy and other
future conditions. Forward-looking statements are subject to risks,
uncertainties and assumptions and may be affected by known and
unknown risks, trends, uncertainties and factors that are beyond
NXDT's control. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated,
estimated or projected. Important factors that could cause actual
results to differ materially from those in the forward-looking
statements include regional, national or global political,
economic, business, competitive, market and regulatory conditions,
and those described in greater detail in our filings with the
Securities and Exchange Commission, particularly those described in
NXDT's Annual Report on Form 10-K and Quarterly Reports on Form
10-Q. Readers should not place undue reliance on any
forward-looking statements and are encouraged to review the NXDT's
Annual Report on Form 10-K and other filings with the SEC for a
more complete discussion of risks and other factors that could
affect any forward-looking statement. Any forward-looking statement
made in this press release speaks only as of the date on which it
is made. NXDT undertakes no obligation to publicly update or revise
any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as required
by law.
CONTACT INFORMATION
For Additional Information/Updates on UDF
IV
Website: www.udfaccountability.com
Email: udfinvestors@nexpoint.com
Media Contacts
Lucy
Bannon (NexPoint): lbannon@nexpoint.com
Paul Caminiti/Pamela
Greene (Reevemark): nexpointteam@reevemark.com
NexPoint Investor Relations
Kristen
Thomas: ir@nexpoint.com
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content:https://www.prnewswire.com/news-releases/nexpoint-submits-competing-proposal-for-udf-iv-with-improved-shareholder-economics-awaits-engagement-from-udf-iv-board-of-trustees-302387957.html
SOURCE NexPoint Advisors, L.P.
