Large Shareholder to Nominate Four Independent
Trustees to Restore Accountability and Transparency Following
Criminal Convictions of Members of Former Management Team
DALLAS, June 13,
2024 /PRNewswire/ -- NexPoint Real Estate
Opportunities, LLC (together with its affiliates "NexPoint")
announced today that it has sent a letter to fellow shareholders of
United Development Funding IV ("UDF IV" or the "Company"), a real
estate investment trust, ahead of the Company's upcoming Annual
Meeting of Shareholders. The Circuit Court for Baltimore City, Maryland recently issued an
order requiring UDF IV to hold an Annual Meeting on or before
December 31, 2024, at which four of
the five trustees must stand for election.
The letter, included below, notifies shareholders of this recent
development and of NexPoint's intent to nominate four highly
qualified, independent trustees who will act in the interest of
shareholders to restore accountability at UDF IV.
NexPoint encourages shareholders to visit
udfaccountability.com and complete the contact form to receive
ongoing updates about the Company and the upcoming Annual Meeting.
Shareholders can also contact NexPoint via email at
udfinvestors@nexpoint.com.
Important Update for Shareholders of United
Development Funding IV (UDF IV):
Opportunity to Restore Accountability and
Transparency at Upcoming Annual Meeting
Dear Fellow Shareholders:
The corporate governance failures at United Development Funding
IV ("UDF IV" or the "Company") have left shareholders suffering for
years with little hope for recovering value. These failures are
highlighted in lawsuits from the Securities and Exchange Commission
and Department of Justice, resulting in multimillion-dollar fines,
criminal convictions, and prison sentences for several former
executives. Sadly, these actions have fallen short in providing
adequate resolution for shareholders.
As major shareholders ourselves, NexPoint Real Estate
Opportunities, LLC (together with our affiliates "NexPoint") has
been working to establish proper oversight and accountability at
UDF IV. While management and the Board have resisted our efforts,
we are notifying you of a major development that finally gives
shareholders a chance to take action to address the corporate
governance failures by electing new trustees to the UDF IV Board
who will represent your interests and provide a path to recovering
value.
- For the first time in over eight years, you have the
power to enact positive change at UDF IV. A recent order
from the Circuit Court for Baltimore
City, Maryland requires the Company to hold its next Annual
Meeting of Shareholders on or before December 31, 2024, during which four of the five
trustees must stand for election. While the meeting date has not
been announced, we want you to be prepared to exercise your right
to vote. We will notify you once the date of the meeting is set.
To receive updates via email, complete the contact form at
udfaccountability.com or email udfinvestors@nexpoint.com.
- NexPoint intends to nominate four highly qualified and
independent trustees to replace incumbent trustees Lawrence S. Jones, Philip K. Marshall, J. Heath Malone, and Steven
J. Finkle, who we believe have repeatedly violated their
fiduciary duties. The incumbent trustees' actions have continually
advanced their own interests and those of UDF IV management at the
expense of shareholders.
- The incumbent trustees must be replaced. They created an
insular governance structure and served as an impediment to
liquidity for long-suffering shareholders. In response to basic
shareholder requests for accountability, the incumbents changed the
Company bylaws, entrenching themselves and disenfranchising
shareholders by impeding your voting rights. In fact, three of UDF
IV's independent trustees have not stood for election since 2015;
one independent trustee has never been elected by
shareholders. The incumbents' failure to protect investors'
interests has resulted in, among other things, a de-registered,
illiquid stock, and their entrenchment tactics have—until
now—limited all recourse available to shareholders to enforce basic
rights.
- The Board's egregious actions continued even
after the Company's executives were
convicted and sent to prison for fraud. Under the
Board's leadership, the Company's advisor and management carried
out a massive multi-year deception and fraud through
the UDF IV "investment" program. Worse, once this deception was
uncovered, the Board sat idle, allowing the advisor and much of the
management team to remain in place, protecting their interests at
the expense of shareholders. Of note, the Board also appears to
have supported former UDF IV management in improperly using
shareholder money to pay legal fees to defend the criminal charges
that ultimately sent former management to prison.
- NexPoint's actions have already positively
impacted shareholders and resulted in the upcoming, Court-ordered
2024 Annual Meeting. We now need your support to
replace the incumbent trustees and put UDF IV on a path to
recovering value. Our nominees have decades of relevant
professional experience and will seek to restore proper governance
and establish a path to liquidity. It is time for UDF IV to have a
Board that serves the interests of all shareholders—not just
entrenched management. The upcoming Annual Meeting is shareholders'
opportunity to reclaim your rightful ownership of the Company
following years of corrupt governance and stagnant illiquidity. We
hope you will support us in this endeavor.
Sincerely, NexPoint Real Estate Opportunities, LLC
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
For 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.