CommonWealth REIT removes full board of trustees

A special meeting to elect a new board will be called on or before May 23, according to a statement by the Newton, Mass., real estate investment trust.

Mar 25, 2014 @ 8:55 am (Updated 9:06 am) EST

CommonWealth REIT confirmed the removal of its entire board of trustees after receiving written consent from the required two-thirds of shareholders.

A special meeting to elect a new board will be called on or before May 23, according to a statement released Tuesday by the Newton, Mass.,based real estate investment trust.

A campaign for removal of the board was led by investors Corvex Management LP and Related Cos. The New York-based firms have proposed a new slate of board candidates led by billionaire investor Sam Zell and David Helfand, co-president of Zell’s Equity Group Investments.

Corvex and Related, which together own 9.6% of CommonWealth, began their campaign to oust the trustees a year ago. They argued that the ownership of an external management firm by CommonWealth President Adam Portnoy and his father, Barry, a company founder, led to conflicts of interest and underperformance at the real estate investment trust. Both Portnoys have been directors of CommonWealth, which pays fees to the management company.

Corvex and Related said last week they had votes from 81% of shares to remove the board.

Mr. Zell and Mr. Helfand have agreed to serve as CommonWealth’s chairman and chief executive officer, respectively, if they are chosen for the new board.

(Bloomberg News)

  @IN Wire

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