Cites UDF IV Board and Management
Entrenchment, Lack of Transparency, Shareholder Value Erosion and
Breach of Shareholder Trust
Says NexPoint Expertise is Valuable
Contribution to the Board
DALLAS, Dec. 6, 2024
/PRNewswire/ -- NexPoint Real Estate Opportunities, LLC (together
with its affiliates "NexPoint") today announced that Egan-Jones, an
independent proxy advisory firm, has recommended that United
Development Funding IV ("UDF IV" or the "Company") shareholders
vote for long overdue change to the UDF IV Board of Trustees.
Specifically, Egan-Jones recommends that UDF IV shareholders vote
"FOR" all NexPoint nominees, Paul S.
Broaddus, Edward N.
Constantino, John A. Good and
Julie Silcock, and "WITHHOLD"
on UDF IV's incumbent trustees, Lawrence S.
Jones, Phillip K. Marshall,
Steven J. Finkle and J. Heath Malone.
In its recommendation for ALL NexPoint nominees, Egan-Jones
concluded:
- "The absence of an annual shareholders' meeting for eight years
in a row evidently suggests the management's actions to
disenfranchise shareholder rights. Despite the investigations and
engagement of regulatory bodies, the Company has shown lack of
accountability and compliance. Moreover, the lack of proper
oversight by the incumbent trustees brings into serious question
the integrity and independence of the board."
- "[T]he lack of transparency and inadequate disclosure controls
have concealed the Company's true condition. The board has a
fundamental responsibility to act as a liaison between management
and shareholders. Despite shareholders' calls for greater
transparency...the board has failed in its fiduciary duty to
effectively safeguard and represent shareholders' interests."
- "While the proposed merger may appear to offer liquidity to
shareholders, we believe it reflects a reactionary response by the
Company… Our concerns include the lack of transparency regarding
the due diligence process and the potential shopping of companies
during the merger decision."
- "Post the conviction era, we believe the board should have
refreshed its composition to enhance the Company's reputation. It
is concerning that four trustees...who all served on the Board
during the fraud investigations, sanctions and the
subsequent conviction of the former UDF IV executives remained in
office…failed to restore the Company's reputation and address the
erosion of shareholder value."
- "Even if this is not a contested meeting, we would advise the
shareholders to withhold votes from the incumbent trustees."
- "[T]o restore shareholder trust and confidence, we believe that
UDF IV urgently needs a refreshed board to strengthen its strategy
and address the erosion of company value caused by mismanagement,
excessive capital spending, and poor loan portfolio allocation and
management."
- "We are confident that the expertise in REIT, M&A, and
legal matters brought by the NexPoint nominees will make a valuable
contribution to the board."
NexPoint's Nominees Will Serve Shareholders'
Interests
NexPoint urges shareholders to vote for much needed change at
UDF IV by supporting its nominees: Paul S.
Broaddus, Edward N.
Constantino, John A. Good,
and Julie Silcock, and rejecting UDF
IV's current Board, which has overseen criminal and fraudulent
behavior and eroded shareholder value.
Shareholders are encouraged to vote using NexPoint's
GREEN proxy materials to bring accountability and
maximize value at UDF IV.
For updates, visit udfaccountability.com or email NexPoint at
udfinvestors@nexpoint.com.
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.
NexPoint has neither sought nor obtained consent from any third
party to use previously published information in this press
release, including any quotes used in this press release.
CONTACT INFORMATION
UDF IV Investor Contacts
Chuck Garske / Jeremy Provost / Theo
Caminiti (Okapi Partners):
Email: info@okapipartners.com
Phone: (212) 297-0720
For Additional 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.