WHITE PLAINS, N.Y.,
Nov. 8, 2011 /PRNewswire/ --
PRESIDENTIAL REALTY CORPORATION (OTCQB: PDNLA) (OTCQB: PDNLB).
Jeffrey Joseph, President and Chief Executive Officer of
Presidential Realty Corporation, a real estate investment trust
that currently trades in the over-the-counter market (the
"Company"), announced today that the Company had terminated its
Plan of Liquidation and completed a strategic transaction (the
"Transaction") with Signature Community Investment Group LLC, its
founder, Nickolas W. Jekogian, III,
and persons introduced to the Company by Mr. Jekogian. The
purpose of the Transaction is to permit the Company to continue its
operations under a new management team and afford the Company an
opportunity for growth. The principal features of the Transaction
are as follows:
- Pdl Partnership, a general partnership of which Mr. Joseph and
two directors and former officers of the Company are the general
partners and that owned approximately 51% of the Company's
outstanding Class A Common Stock, has sold 177,013 shares of Class
A Common Stock of the Company, representing 40% of the outstanding
Class A Shares, to the BBJ Family Irrevocable Trust for a purchase
price of $1.00 per share. The
Trust was created by Mr. Jekogian for the benefit of members of his
family and Nickolas Jekogian, Jr.,
Mr. Jekogian's father, is the sole trustee. The holders of the
Class A Common Stock have the right to elect two-thirds of the
members of the Company's Board of Directors.
- The Company sold 250,000 shares of newly issued Class B Common
Stock, representing 6.8% of the total outstanding Class A and Class
B Common Stock of the Company after taking the sale into account,
to two individuals introduced to the Company by Mr. Jekogian for a
purchase price of $1.00 per share.
- Steven Baruch, Thomas Viertel and Mortimer Caplin resigned from
the Company's Board of Directors and Robert
Feder resigned as Chairman of the Board. Mr. Jekogian,
Alexander Ludwig and Jeffrey Rogers (an individual introduced by Mr.
Jekogian) were appointed as directors to fill the vacancies on the
Board, with Mr. Jekogian elected as Chairman of the Board. Mr.
Joseph, Robert Feder and
Richard Brandt will continue as
members of the Board of Directors but Mr. Joseph will resign as
President and Chief Executive officer of the Company prior to the
end of November.
- Mr. Jekogian has been elected as Chief Executive Officer of the
Company and Mr. Ludwig has been elected as President and Chief
Operating Officer of the Company, to take office before the end of
November. The Company has entered into employment agreements
with each of them and has issued options to acquire 370,000 shares
of Class B Common Stock to each of them at a purchase price of
$1.25 per share.
- The Board of Directors declared a special dividend in the
amount of $.35 per share on the
Company's Class A and Class B Common Stock to be paid on
November 28, 2011 to stockholders of
record on November 18, 2011 (the
"Special Dividend"). The purchasers of the 250,000 Class B
shares are not entitled to receive the Special Dividend.
Similarly, the purchaser of the Class A shares is not
entitled to retain the Special Dividend, which will be paid over to
Pdl Partnership.
- In order to induce Signature and the purchasers of the Class A
and Class B shares to enter into the transactions and to provide
liquidity to the Company to pay the Special Dividend, Messrs.
Joseph, Baruch and Viertel amended their Employment Agreements with
the Company to waive or defer an aggregate of $1,187,500 of the amounts payable to them upon
retirement, of which $593,750 was
waived permanently and the balance of $593,750 was deferred for a three-year period.
The amounts waived and deferred were in addition to the
reductions in the compensation otherwise payable to them upon
termination of their employment that were agreed to in August 2010 in connection with the approval by
the Board of the Plan of Liquidation.
- The Company entered into a Property Management Agreement with
Signature to be the exclusive managing and leasing agent for the
Company's Mapletree Industrial Center property in Palmer, Massachusetts and an Asset Management
Agreement with Signature to provide oversight of the Company's
Mapletree Industrial Center property and an office building in
Hato Rey, Puerto Rico.
- In connection with the Transaction and in light of the plans
for the Company presented to the Company's Board of Directors by
Messrs. Jekogian and Ludwig and the Board's consideration of the
alternatives available to the Company and other matters it deemed
relevant, including the tax consequences of the Transaction, the
Board of Directors determined that the Transaction will be more
favorable to the stockholders of the Company than effecting the
plan of liquidation and sale of all or substantially all of the
assets of the Company, and pursuant to the discretion given to the
Board of Directors by the stockholders in the Plan of Liquidation,
terminated the Plan of Liquidation approved by the stockholders on
January 20, 2011.
Mr. Joseph said that the Board of Directors was pleased to
welcome Mr. Jekogian, Mr. Ludwig and Mr. Rogers as members of the
Board and was looking forward to their leadership in moving the
Company forward.
Mr. Jekogian said that he and Mr. Ludwig, together with the
Signature team, were excited by the opportunity to stabilize the
existing assets and contribute to the future growth of Presidential
and that he looked forward to working with the Board of Directors.
Mr. Jekogian is the founder, owner and President of Signature
Community Investment Group LLC, a Delaware limited liability company (together
with its affiliates, "Signature"), an integrated real estate
company focused on multi family rental properties in urban areas.
Mr. Jekogian also has more than 15 years experience
developing commercial projects in the New
York and Philadelphia
Metropolitan areas for retail chains. Mr. Jekogian will not
be exclusive to the Company. He will continue to own and
operate Signature. The Company's independent directors will
review all transactions between the Company and Signature and the
activities of Mr. Jekogian.
Mr. Ludwig has provided consulting services for Signature since
February 2011. He worked at
Urban Real Estate Growth Fund LLC from the beginning of 2009 until
October 2011, where he oversaw new
real estate investments. Prior to joining Urban Real Estate
Growth Fund LLC, Mr. Ludwig worked from 2003 to 2008 for ADG
Capital LLC, where he oversaw multiple real estate development
projects. Mr. Ludwig previously held various positions in
banking where he structured debt and corporate finance
transactions. Mr. Ludwig will continue to provide consulting
services to and receive compensation from Signature. Mr.
Ludwig has agreed to keep the independent directors of the Board
advised of his activities for and compensation from Signature.
Mr. Rogers has served as President and Chief Operating Officer
since February 2005 and as Chief
Operating Officer between February
2004 and February 2005 of
Integra Realty Resources, Inc., a commercial real estate valuation
and counseling firm, where he oversees corporate operations,
technology and software initiatives, and all aspects of financial
reporting and audit procedures. Mr. Rogers also serves on the Board
of Directors of Integra Realty Resources, Inc. and IRR Residential,
LLC, an affiliate of Integra Realty Resources, Inc. Since
March 2009, Mr. Rogers has served as
a Director of TNP Strategic Retail Trust, Inc., a real estate
investment trust who files periodic reports under the Securities
Exchange Act of 1934. Mr. Rogers also serves on TNP's audit
committee and investment committee.
About Presidential Realty
Presidential Realty Corporation, a real estate investment trust,
is engaged principally in the ownership of income-producing real
estate and in the holding of notes and mortgages secured by real
estate or interests in real estate.
Forward-Looking Statements
Certain statements made in this press release that are not
historical fact may constitute "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such forward-looking statements include statements
regarding the intent, belief or current expectations of the Company
and its management. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause
the actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors include, among other things, the
following:
- the risk that new management will not be able to stabilize the
Company;
- the risk that lenders on the Company's property in Hato Rey, Puerto
Rico may foreclose on that property;
- the risk that the Company may not be able to raise capital or
make real estate investments;
- the risk and expense of stockholder litigation with respect to
termination of the plan of liquidation;
- continuing generally adverse economic and business conditions,
which, among other things (a) affect the demand for retail and
office space at properties owned by the Company and (b) affect the
availability and creditworthiness of prospective tenants and the
rental rates obtainable at the properties;
- continuing adverse conditions in the real estate markets, which
affect the ability of the Company to sell, or refinance the
mortgages on, its properties and which may also affect the ability
of prospective tenants to rent space at these properties;
- general risks of real estate ownership and operation;
- governmental actions and initiatives;
- environmental and safety requirements; and
- the Company's ability to continue as a real estate investment
trust ("REIT").
Additional factors that could cause Presidential's results to
differ materially from those described in the forward-looking
statements can be found in the Company's 2010 Annual Report on Form
10-K and its Quarterly Report on Form 10-Q for the quarter ended
June 30, 2011. Except as required by
law, the Company expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any changes in the Company's
expectations with regard thereto or change in events, conditions or
circumstances on which any such statement is based.
For further information contact:
Nickolas W. Jekogian, III,
njekogian@scig.co
Or Jeffrey F. Joseph,
jjoseph@presrealty.com
Tel: 1-914-948-1300
SOURCE Presidential Realty Corporation