Proposed Transaction Demonstrates NexPoint's
Ongoing Impact at UDF IV
If Elected, NexPoint Nominees Would Review and
Pursue Transaction to Maximize Shareholder Value
DALLAS, Dec. 3, 2024
/PRNewswire/ -- NexPoint Real Estate Opportunities, LLC (together
with its affiliates "NexPoint") today commented on the proposed
transaction between United Development Funding IV ("UDF IV" or the
"Company"), a real estate investment trust, and Ready Capital
Corporation ("Ready Capital"), a multi-strategy real estate finance
company:
"NexPoint is pleased that our multi-year
advocacy and litigation continues to benefit UDF IV shareholders by
bringing forward a potential transaction that could deliver
much-needed liquidity. While we evaluate this proposal further,
shareholders should note upfront that the potential $5.89 per share capped value offered under the
acquisition is significantly below the $9.47 per share book value that UDF IV provided
in its latest financials.
Over 40% of that potential value is comprised
of $75 million in contingent cash
distributions, which would represent a continued return of capital
rather than meaningful value creation. Even so, the merger
agreement does not guarantee this distribution; it merely allows
UDF IV to make distributions 'up to' that amount. Given the latest
financials and other cash obligations outlined in the agreement,
the feasibility and likelihood of achieving the full distribution
appears questionable.
Though the proposed transaction shows that
our efforts are making an impact, we remain concerned about the
lack of accountability and transparency at UDF IV under the current
Board, which includes Trustees who presided over years of
fraud, disclosure violations, poor performance, and
persistent illiquidity. Notably, our concerns are reinforced by the
intentional withholding of the material terms set forth in the
Disclosure Schedules to the merger agreement, without which
shareholders cannot accurately evaluate the proposed
merger.
If elected, NexPoint's nominees would
thoroughly review the proposed terms of the transaction and pursue
the best possible outcome for shareholders. We therefore
continue to urge UDF IV shareholders to support NexPoint's nominees
at the upcoming annual meeting."
NexPoint's ongoing efforts to drive accountability at UDF IV
have already led to a court order compelling the Company to hold an
annual meeting and fair election of all independent Trustees for
the first time in over eight years. These efforts now continue to
benefit shareholders by spurring this potential acquisition.
The Company has announced the court-ordered annual meeting will
take place on December 10, 2024,
which will be the last opportunity for shareholders to vote in the
critical Board election. NexPoint urges shareholders to vote for
its nominees: Paul S. Broaddus,
Edward N. Constantino, John A. Good, and Julie
Silcock, and reject UDF IV's current Board, which has
overseen criminal and fraudulent behavior and significant losses in
shareholder value and liquidity.
If elected, NexPoint's nominees are dedicated to working on
behalf of all shareholders to drive accountability and maximize
value at UDF IV, including by reviewing and pursuing transactions
that align with shareholders' interests.
- Shareholders are encouraged to vote FOR NexPoint's nominees
using the GREEN proxy materials.
For more information, visit udfaccountability.com or email
NexPoint at udfinvestors@nexpoint.com.
About NexPoint
NexPoint Real Estate Opportunities, LLC is a wholly owned
subsidiary of NexPoint Diversified Real Estate Trust, Inc. (NYSE:
NXDT), an affiliate of NexPoint Advisors, L.P.
NexPoint Advisors, L.P. is an SEC-registered adviser on the
NexPoint alternative investment platform. It serves as the adviser
to a suite of funds and investment vehicles, including a closed-end
fund, interval fund, business development company, and various real
estate vehicles. For more information visit www.nexpoint.com
IMPORTANT INFORMATION
NexPoint Real Estate Opportunities, LLC ("NexPoint") intends to
deliver a proxy statement with respect to its solicitation of
proxies for nominees to be elected to the United Development
Funding IV ("UDF IV") Board of Trustees at the Annual Meeting of
Shareholders of UDF IV. The date for the Annual Meeting has not yet
been set and NexPoint is not soliciting proxies at this time.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE NEXPOINT PROXY
STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) WHEN
AVAILABLE IN ITS ENTIRETY BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION ABOUT ANY SOLICITATION. Copies of the documents will be
made available free of charge from NexPoint by accessing the
website www.udfaccountability.com.
NexPoint, its affiliates, their directors and executive officers
and other members of management and employees may be participants
(collectively "Participants") in the solicitation of proxies by
NexPoint. Information about NexPoint's nominees to the UDF IV Board
of Trustees and information regarding the direct or indirect
interests in UDF IV, by security holdings or otherwise, of
NexPoint, the other Participants and NexPoint's nominees will be
available in the proxy statement. NexPoint's disclosure of any
security holdings will be based on information made available to
NexPoint by such Participants and nominees. UDF IV is no longer
subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended. Consequently, NexPoint's knowledge of
significant security holders of UDF IV and as to UDF IV itself is
limited.
CONTACT INFORMATION
UDF IV Investor Contacts
Chuck Garske / Jeremy Provost / Theo
Caminiti (Okapi Partners):
Email: info@okapipartners.com
Phone: (212) 297-0720
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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SOURCE NexPoint Advisors, L.P.