Intends to Fight AHT’s Baseless Lawsuit,
Which Appears to Represent a Blatant Entrenchment Maneuver Designed
to Disenfranchise Cygnus and Insulate Chairman Monty Bennett and
his Boardroom Allies
Highlights the Board Appears to be Wasting
AHT’s Finite Resources on Under-Handed Efforts to Harm Cygnus and
Thwart a Fair, Open Election Contest
Notes Cygnus Will Not be Deterred by AHT’s
Low-Road Campaign and Remains Fully Committed to Offering
Stockholders the Opportunity to Vote for Board Change at the 2021
Annual Meeting
Cygnus Capital, Inc. (together with its affiliates, “Cygnus” or
“we”), which collectively with the other participants in its
solicitation beneficially owns approximately 2.7% of the
outstanding shares of common stock of Ashford Hospitality Trust,
Inc. (NYSE: AHT) ("AHT" or the “Company”), including 40,000 shares
of common stock underlying certain call options, and a significant
portion of each of the outstanding series of preferred stock, today
commented on the lawsuit filed by AHT on January 19, 2021. AHT is
suing Cygnus in order to prevent the firm from nominating director
candidates and running an election contest at the Company’s 2021
Annual Meeting of Stockholders (“Annual Meeting”).
As a reminder, on January 5, 2021 Cygnus announced that it has
nominated five highly-qualified and independent candidates for
election to AHT’s eight-member Board of Directors (the “Board”) at
the Annual Meeting. Please visit www.RenovateAshford.com to learn
more about the Cygnus slate and sign up for updates.
Christopher Swann, Founder and Chief Executive Officer of
Cygnus, stated:
“The lawsuit filed last week by AHT is baseless and we intend on
vigorously defending ourselves. This action appears to be a blatant
entrenchment maneuver intended to disenfranchise Cygnus and
insulate Monty Bennett and his boardroom allies, who have
demonstrated a flagrant disregard for stockholders and their rights
for years. We contend that the incumbent Board has irreparably
impugned its credibility by once again weaponizing litigation in an
attempt to silence a sizable stockholder and undermine corporate
democracy.
We believe stockholders should be equally alarmed that the Board
is wasting AHT’s finite resources on under-handed efforts to harm
Cygnus and thwart a fair, open election contest. AHT recently took
the extraordinary step of having its external legal counsel – paid
for by stockholders – directly contact and seemingly harass
hundreds of our limited partners, who had nothing to do with
Cygnus’ decision to nominate director candidates. This followed
AHT’s representatives apparently trying to intimidate our nominees,
including one who ultimately resigned from our slate in early
January rather than serve as its sixth member. Fortunately for
stockholders, Cygnus will not allow Mr. Bennett to use
scorched-earth litigation and reputational attacks as means of
escaping accountability.
In our view, the need for meaningful change atop AHT has only
been reinforced by the Board’s increasingly anti-stockholder
agenda. AHT recently announced it intends to grant approximately 1%
of its stock to its Chief Executive Officer, Rob Hays, who is one
of Mr. Bennett’s long-time associates. The Company also amended its
external advisory agreement to make it more difficult to terminate
the Ashford Inc. arrangement that handsomely rewards the Bennett
family. These moves come on the heels of seemingly perpetual
dilution.
It is important to stress that Cygnus brings a long-term mindset
to its public market investments. Although we have never before
nominated director candidates, the dire situation at AHT has
compelled us to fight for change and protect stockholders from
further dilution and suffering. Cygnus will
not be deterred by the incumbent Board’s low-road campaign and
remains fully committed to offering stockholders the opportunity to
vote for sorely-needed change at this year’s Annual Meeting.
We continue to believe there is tremendous value that can
ultimately be unlocked at AHT with a reconstituted and independent
Board at the helm.”
About Cygnus
Cygnus is an integrated real estate investment and alternative
asset management company focused on opportunistic, special
situation, and distressed real estate investments. Cygnus targets
long term, absolute returns for investors by applying a
differentiated approach to real estate investing. By placing an
emphasis on the acquisition, workout, and disposition of real
estate debt assets characterized by their complexity, inefficiency,
and niche qualities, Cygnus is able to target superior, absolute
returns for its investors. Cygnus beneficially owns approximately
(i) 2.7% of the Company’s outstanding shares of common stock, (ii)
4.6% of the Company’s outstanding 8.45% Series D Cumulative
Preferred Stock, (iii) 6.2% of the Company’s outstanding 7.375%
Series F Cumulative Preferred Stock, (iv) 6.9% of the Company’s
outstanding 7.375% Series G Cumulative Preferred Stock, (v) 8.5% of
the Company’s outstanding 7.5% Series H Cumulative Preferred Stock,
and (vi) 5.5% of the Company’s outstanding 7.5% Series I Cumulative
Preferred Stock.1
Certain Information Concerning the
Participants
Cygnus, together with the participants named herein
(collectively, the “Participants”), intends to file a preliminary
proxy statement and accompanying WHITE proxy card with the
Securities and Exchange Commission (the “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
Ashford Hospitality Trust, Inc., a Maryland corporation (the
“Company”).
THE PARTICIPANTS STRONGLY ADVISE ALL STOCKHOLDERS OF THE COMPANY
TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S
WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN
THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT
WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES
SHOULD BE DIRECTED TO THE PARTICIPANTS’ PROXY SOLICITOR.
The Participants in the proxy solicitation are anticipated to be
Cygnus Opportunity Fund, LLC (“Cygnus Opportunity”), Cygnus
Property Fund IV, LLC (“Cygnus IV”), Cygnus Property Fund V, LLC
(“Cygnus V”), Cygnus Capital Advisers, LLC (“Cygnus Capital”),
Cygnus General Partners, LLC (“Cygnus GP”), Cygnus Capital Real
Estate Advisors II, LLC (“Cygnus Property GP”), Cygnus Capital,
Inc. (“Cygnus”), Christopher Swann, Richard Burns, Shannon M.
Johnson, William C. Miller, Jr., and Roderick W. Newton II.
As of the date hereof, Cygnus Opportunity directly owned (i)
771,011 shares of the Company’s Common Stock, $0.01 par value per
share (the “Common Stock”), (ii) 8,500 shares of the Company’s
8.45% Series D Cumulative Preferred Stock, $0.01 par value per
share (the “Series D Preferred Stock”), (iii) 36,902 shares of the
Company’s 7.375% Series F Cumulative Preferred Stock, $0.01 par
value per share (the “Series F Preferred Stock”), (iv) 59,252
shares of the Company’s 7.375% Series G Cumulative Preferred Stock,
$0.01 par value per share (the “Series G Preferred Stock”), (v)
31,842 shares of the Company’s 7.50% Series H Cumulative Preferred
Stock, $0.01 par value per share (the “Series H Preferred Stock”),
and (vi) 578 shares of the Company’s Series I Cumulative Preferred
Stock, $0.01 par value per share (the “Series I Preferred Stock”).
As of the date hereof, Cygnus IV directly owned (i) 40,000 shares
of Common Stock, (ii) 12,000 shares of Series G Preferred Stock,
and (iii) 12,000 shares of Series I Preferred Stock. As of the date
hereof, Cygnus V directly owned (i) 250,112 shares of Common Stock,
(ii) 75,386 shares of Series D Preferred Stock, (iii) 143,262
shares of Series F Preferred Stock, (iv) 212,820 shares of Series G
Preferred Stock, (v) 188,116 shares of Series H Preferred Stock,
and (vi) 179,457 shares of Series I Preferred Stock. Cygnus
Capital, as the investment advisor to Cygnus Opportunity, may be
deemed to beneficially own the securities of the Company directly
owned by Cygnus Opportunity. Cygnus GP, as the general partner to
Cygnus Opportunity, may be deemed to beneficially own the
securities of the Company directly owned by Cygnus Opportunity.
Cygnus Property GP, as the general partner and investment advisor
to each of Cygnus IV and Cygnus V, may be deemed to beneficially
own the securities of the Company directly owned by each of Cygnus
IV and Cygnus V. Cygnus, as the managing member of each of Cygnus
Capital, Cygnus GP, and Cygnus Property GP, may be deemed to
beneficially own the securities of the Company directly owned by
each of Cygnus Opportunity, Cygnus IV, and Cygnus V. Mr. Swann, as
the President and Chief Executive Officer of Cygnus, may be deemed
to beneficially own the securities of the Company directly owned by
each of Cygnus Opportunity, Cygnus IV, and Cygnus V. In addition,
as of the date hereof, Mr. Swann beneficially owns (i) 527,875
shares of Common Stock, including 284,125 shares of Common Stock
beneficially owned directly by members of his immediate family,
which includes 40,000 shares of Common Stock underlying certain
American-style call options, having an exercise price of $5.00 and
expire on March 19, 2021, (ii) 10,000 shares of Series F Preferred
Stock, (iii) 28,500 shares of Series G Preferred Stock, including
11,000 shares of Series G Preferred Stock owned directly by members
of his immediate family, (iv) 15,000 shares of Series H Preferred
Stock, and (v) 2,500 shares of Series I Preferred Stock. As of the
date hereof, none of Ms. Johnson or Messrs. Burns, Miller, or
Newton beneficially own any securities of the Company.
1 Cygnus’ ownership percentage of the different series of
preferred stock was calculated without taking into effect the
aggregate 952,611 shares of the different series of preferred stock
purchased by the Company in private exchange agreements.
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version on businesswire.com: https://www.businesswire.com/news/home/20210125005210/en/
For Investors: Saratoga Proxy Consulting John Ferguson / Joe
Mills, 212-257-1311 jferguson@saratogaproxy.com /
jmills@saratogaproxy.com For Media: Profile Greg Marose / Charlotte
Kiaie / Rachel Goun, 347-343-2999 cygnus@profileadvisors.com
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