Saturday, 25 April 2015
Last updated 14 hours ago
Mar 11 2014 | 8:15am ET
The embattled board of directors at CommonWealth REIT has won a rare show of support in its battle with a hedge fund.
Moody's Investors Service on Friday put the company's credit rating on review for a possible downgrade, citing Corvex Fund Management's plan to make private-equity billionaire Sam Zell its chairman should it succeed in ousting CommonWealth's board. Moody's said a victory for Corvex would create the potential "for increased leverage, secured debt and/or core asset sales."
Zell defended his record, saying that he doesn't put the companies he runs at such risk.
Moody's fears put it at odds with proxy advisors Institutional Shareholder Services and Glass Lewis & Co. Glass Lewis threw its backing behind Corvex's candidates last week, citing the current board's "failed arguments and suspect methodologies," adding that the risks of replacing the board are "both transitory and decidedly unlikely."
Corvex, which is working with Related Fund Management, is widely seen as likely to succeed in its battle to remove the Portnoy family from control of the REIT: The two firms last year claim to have won the proxy battle, only to see it invalidated on technical grounds.
CommonWealth investors are currently voting on whether to remove the current board. If the proposal receives two-thirds of the vote by March 20, it would force a board election ahead of its June 15 annual meeting.
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…