ARCP shareholder calls for new board in wake of accounting scandal

American Realty Capital Properties Inc. shareholder Twin Securities Inc. said that all but one of the company's board members should refrain from seeking re-election this year in the wake of an accounting scandal that led to the departure of senior management. David Simon, chief executive officer of Twin Securities, said in a letter sent on Tuesday that he has “deep reservations” about the existing board members, given their “longstanding ties” to Nicholas Schorsch, the former ARCP chairman and chief executive officer who resigned last year. “It was on their watch that not only the accounting scandal, which led to the resignations of several company executives, but also several other events that were injurious to the interests of shareholders occurred,” according to Mr. Simon's letter. Mr. Simon said that all board members except Bruce Frank should refrain from seeking re-election at this year's annual meeting. He also asked that a shareholder representative be added to the board and that all new members have “significant real estate experience or an expertise that will be beneficial to the company.” Twin Securities owns about 1.8% of the American Realty's outstanding shares, according to data compiled by Bloomberg. Its request for a change to the board follows a similar demand made last month by activist investment firm Corvex Management, which has about 7.8% of the company's shares.