NEW YORK, June 9, 2021 /PRNewswire/ -- The shareholder
group led by Lionbridge Capital I, LP and its affiliates, Robotti
& Company, Inc. and its affiliates, and Winthrop Realty
Partners, L.P. and its affiliates, who collectively own 897,085
shares, or approximately 6.0% of the outstanding shares of CIM
Commercial Trust Corporation ("CMCT" or the "Company") (NASDAQ:
CMCT and TASE: CMCT-L), today issued the following statement in
connection with a severe disclosure omission and debilitating
material misstatements by CMCT that the group has uncovered under
the rules of the Securities and Exchange Commission (the "SEC"),
which serves to revoke CMCT's Form S-3 eligibility for its current
Rights Offering:
"The Company purports to have amended its Charter at some point
during the fall of 2019 to decrease the beneficial ownership
limitation applicable to its stockholders from 9.8% to 6.25%. As
recently as June 1, 2021, CMCT
disclosed in its preliminary prospectus supplement for the Rights
Offering that its 'charter prohibits any person from acquiring or
holding, directly or indirectly, shares of [our] capital stock in
excess of 6.25%, in number of shares or value, whichever is more
restrictive.' A beneficial ownership limitation of 6.25% under the
Charter is also cited in numerous filings CMCT has made with the
SEC since October 2, 2019, including
its Annual Reports on Form 10-K. However, CMCT failed to disclose
this purported amendment to its Charter on a Form 8-K, which is a
clear requirement under SEC rules. The purpose of Form 8-K is to
provide investors with real time disclosure of important corporate
events. Generally, a Form 8-K must be filed with the SEC within
four business days of the event that triggers disclosure. When a
company amends it charter or bylaws, Item 5.03(a) of the General
Instructions to Form 8-K requires that such company disclose on a
Form 8-K the effective date of the amendment, and a description of
the provision adopted or changed by amendment and, if applicable,
the previous provision. No such disclosure has ever been made by
CMCT with respect to its purported Charter amendment, despite the
fact that the Company has made multiple other corporate governance
disclosures on Form 8-K."
"There is little doubt that CMCT understands that charter
amendments are required to be filed on Form 8-K with the SEC: CMCT
disclosed and filed two amendments to its Charter on a Form 8-K on
September 6, 2019, in connection with
its 1-for-3 reverse stock split and reversion of the par value of
its issued and outstanding common stock to $0.001 per share. Yet, nowhere to be found among
its SEC filings is any Form 8-K that discloses the Charter
amendment that purportedly lowered the beneficial ownership
limitation from 9.8% to 6.25%. Similarly, we have not seen
any filings made with the Maryland Department of Assessments and
Taxation in connection with the purported Charter amendment."
"A material SEC filing omission such as this, where a purported
Charter amendment relates to fundamental stockholder rights and
attempts to limit stockholder influence, is a grave offense. As we
have informed the SEC and Nasdaq under separate cover, the
consequence of these SEC disclosure violations is ineligibility to
use the Company's shelf registration on Form S-3 for the Rights
Offering. To use Form S-3, a company must, among other things, have
been subject to reporting under the Securities Exchange Act of 1934
for at least twelve full calendar months preceding the filing of
the Form S-3 and have filed all required reports during that
period. Form 8-K is required to be filed upon the occurrence of
specified material events, and failure to comply with this
requirement results in loss of Form S-3 eligibility. Specifically,
a company's failure to file a Form 8-K under Item 5.03 – Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year, will
result in Form S-3 ineligibility. We have no way of knowing the
exact date of the purported Charter amendment or whether it was
appropriately effected. However, because CMCT failed to file it,
the Form S-3 must be declared ineffective."
"These disclosure violations are extremely serious. Misleading
stockholders with respect to material rights attached to their
securities not only causes such investors to be misled, but also
has a sweeping, chilling effect on the market. In our view the
Company is not using the 6.25% ownership limitation to protect its
REIT status, but to stifle existing and potential stockholders from
participating in this flawed Rights Offering."
"In addition to the SEC's broad and severe enforcement options
for an issuer's failure to timely file a report on Form 8-K, there
are also exchange implications for the Company under Nasdaq listing
standards Rule 5250(b)(1) and Rule 5810(b). While all insufficient
disclosure is reflective of inappropriate internal controls, we
believe that CMCT's failure to abide even by the most basic
corporate disclosure requirements is indicative of much more
pervasive governance problems and fiduciary failures at the
Company."
"We have previously detailed the many ways in which CMCT
stockholders have long suffered under an unresponsive,
underperforming, entrenched Board. The Board has refused to engage
with us regarding our slate of five highly qualified director
candidates, and is now delaying the 2021 Annual Meeting so that it
can embark on a defensive, dilutive Rights Offering, with respect
to which the Company's own affiliates have been granted a waiver
that privileges them with regards to oversubscription, thereby
further prejudicing independent stockholders. Unfortunately, it
appears that we have yet to reach the nadir of irresponsible
corporate stewardship at CMCT. As it is clear to us that the
Company has failed to file a required Form 8-K for its purported
Charter amendment, we call on the Board to immediately cease its
scorched-earth tactics and engage with us constructively to address
the structural issues we have identified and work to unlock
stockholder value. It is time for this Board to finally acknowledge
and live up its duties to represent the best interests of the 79%
majority of independent stockholders, and to stop hiding behind its
obstructionist governance and policies."
CONTACT:
Greg Morillo
Lionbridge Capital LP
Email: greg@lionbridgecap.com
Tel: (212) 300-8003
John Moran
Robotti & Company Advisors LLC
Email: moran@robotti.com
Tel: (646) 442-6702
Michael Ashner
Winthrop Realty Partners, L.P.
Email: mashner@winthropcapital.com
Tel: (516) 822-0022
Bob Marese
MacKenzie Partners, Inc.
Email: bmarese@mackenziepartners.com
Tel: (212) 929-5500
Important Information
This filing is not a solicitation of a proxy from any security
holder of CIM Commercial Trust Corporation, a Maryland corporation (the "Company").
Lionbridge Capital, LP and Robotti & Company Advisors, LLC,
together with the other participants named herein (collectively,
the "Participants"), intend to file a definitive proxy statement
and accompanying GOLD proxy card with the Securities and Exchange
Commission ("SEC") to be used to solicit votes for the election of
its slate of highly-qualified director nominees at the 2021 Annual
Meeting of Stockholders of CIM Commercial Trust Corporation.
Stockholders are urged to read the definitive proxy statement
and GOLD proxy card when they become available, because they will
contain important information about the Participants, the nominees,
the Company and related matters. Stockholders may obtain a
free copy of the definitive proxy statement and GOLD proxy card
(when available) and other documents filed by the Participants with
the SEC at the SEC's web site at www.sec.gov. The definitive
proxy statement (when available) and other related SEC documents
filed by the Participants with the SEC may also be obtained free of
charge from the Participants.
Participants in Solicitation
The participants in the proxy solicitation are Lionbridge
Capital, LP ("Lionbridge"), Lionbridge Capital I, LP ("Lionbridge
I"), Lionbridge GP, LLC ("Lionbridge GP") Lionbridge Capital GP,
LLC ("Lionbridge I GP"), Lionbridge Asset Management, LLC
("Lionbridge AM"), The Ravenswood Investment Company L.P.
("Ravenswood I"), Ravenswood Investments III, L.P. ("Ravenswood
III"), Ravenswood Management Company, LLC ("RMC"), Robotti &
Company, Incorporated ("RCI"), Robotti & Company Advisors, LLC
("RCA"), Robotti Securities, LLC, Robert E.
Robotti, Gregory Morillo,
Thomas Ferguson, Mark C. Gelnaw, Raymond
V. Marino II, John S. Moran,
Winthrop Realty Partners, L.P. ("Winthrop Realty"), Winthrop
Strategic Real Estate Fund, L.P. ("Winthrop Strategic Fund"),
Winthrop Strategic Real Estate Fund GP LLC ("Winthrop Strategic
GP"), Winthrop Debt Holdings LLC ("Winthrop Debt"), and
Michael L. Ashner.
As of the date hereof, (i) Lionbridge directly owned 60,761
shares of the Company's Common Stock, $0.001 par value per share (the "Common Stock"),
(ii) Lionbridge I directly owned 183,339 shares of Common Stock;
(iii) Ravenswood I directly owned 293,415 shares of Common Stock;
(iv) Ravenswood III directly owned 174,135 shares of Common Stock;
(v) Lionbridge GP, as the general partner of Lionbridge, may be
deemed the beneficial owner of the 60,761 shares of Common Stock
owned directly by Lionbridge; (vi) Lionbridge I GP as the general
partner of Lionbridge I, may be deemed the beneficial owner of the
183,339 shares of Common Stock owned directly by Lionbridge I;
(vii) Lionbridge AM, as the asset manager of each of Lionbridge and
Lionbridge I, may be deemed the beneficial owner of the 244,100
shares owned directly by Lionbridge and Lionbridge I; (viii)
Gregory Morillo, as the managing
member of each of Lionbridge GP, Lionbridge I GP, LLC and
Lionbridge AM, may be deemed the beneficial owner of the 244,100
shares owned directly by Lionbridge and Lionbridge I; (ix) RMC, as
the general partner of each of Ravenswood I and Ravenswood III, may
be deemed the beneficial owner of the 467,550 shares of Common
Stock owned directly by Ravenswood I and Ravenswood III; (x) RCA,
as the investment advisor of each of Ravenswood I and Ravenswood
III may be deemed the beneficial owner of the 467,550 shares of
Common Stock owned directly by Ravenswood I and Ravenswood III;
(xi) RCI, (a) as the parent of RCA, may be deemed to be the
beneficial owner of the 467,550 shares of Common Stock beneficially
owned by RCA, and (b) as the parent of RS, may be deemed the
beneficial owner of 500 shares of Common Stock owned in a
discretionary accounts managed by RS for a customer; (xii) Mr.
Robotti, as the Managing Director of RMC, may be deemed to be the
beneficial owner of the 467,550 shares of Common Stock beneficially
owned directly by Ravenswood I and Ravenswood III; (xii) Mr.
Robotti, as the President of RCI, may be deemed to be the
beneficial owner of the 467,550 shares of Common Stock owned
directly by Ravenswood I and Ravenswood III, for which RCA acts as
investment adviser, and the 500 shares of Common Stock owned in a
discretionary account managed by RS for a customer; (xiv)
Winthrop directly owned 148,978
shares of Common Stock; (xv) Winthrop Strategic Fund directly owned
100 shares of Common Stock; (xvi) Winthrop Strategic GP, as the
General Partner of Winthrop Strategic Fund may be deemed to be the
beneficial owner of the 100 shares of Common Stock owned directly
by Winthrop Strategic Fund; (xvii) Winthrop Debt, as the sole
member of Winthrop Strategic Fund GP, the General Partner of the
Winthrop Strategic Fund, may be deemed to be the beneficial owner
of the 100 shares of Common Stock owned directly by Winthrop
Strategic Fund; and (xviii) Michael L.
Ashner may be deemed to beneficially own the shares held by
Winthrop and the Winthrop
Strategic Fund. As of the date of hereof, Mr. John Moran was the direct beneficial owner of
35,859 shares of Common Stock and none of Messrs. Ferguson, Gelnaw
or Marino II beneficially owned any shares of Common Stock.
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SOURCE Lionbridge Capital LP