Mercury Requests Ownership Waiver From Maxus Realty Trust, Inc.
23 12월 2004 - 7:29AM
PR Newswire (US)
Mercury Requests Ownership Waiver From Maxus Realty Trust, Inc.
GREENWICH, Conn., Dec. 22 /PRNewswire/ -- Mercury Real Estate
Advisors LLC, an affiliate of Mercury Partners LLC, a real estate
investment management company based in Greenwich, CT, issued this
press release today to Maxus Realty Trust, Inc.'s (NASDAQ:MRTI)
Board of Directors. Mercury Real Estate Advisors LLC 100 Field
Point Road Greenwich, Connecticut 06830 December 22, 2004 Maxus
Realty Trust, Inc. Attn: The Board of Directors 104 Armour Road
North Kansas City, Missouri 64116 Gentlemen: As you are aware from
our Schedule 13-D filing made November 8, 2004 with the Securities
and Exchange Commission, Mercury Real Estate Advisors LLC, on
behalf of its affiliates, at that time was the beneficial owner of
7.1% of the shares of common stock of Maxus Realty Trust, Inc. (the
"Company"). We have subsequently purchased additional shares of
common stock so as to bring our beneficial ownership of the Company
to 7.59%, slightly below the ownership limit of 7.6% artificially
imposed by the Company. We are hereby requesting a waiver to allow
Mercury Real Estate Advisors LLC to purchase up to 19.6% of the
common shares of the Company, an identical percentage to which
David L. Johnson, the Chairman and Chief Executive Officer of the
Company, has the right to purchase. As our ownership entities are
limited partnerships which are "look through" vehicles for Federal
tax purposes, this will not trigger or jeopardize the "5 in 50"
REIT qualification test you used in the Proxy (as defined below) as
your sole justification for the 7.6% limit. Therefore, we assume
you will extend to us the same, equal ownership limit of 19.6% you
afforded Mr. Johnson. In your Schedule 14A Proxy Statement dated
March 31, 2001 (the "Proxy"), the Company solicited and recommended
shareholder approval for an amendment to the Company's Bylaws,
which proposed the following change: " ... (i) increases the stock
ownership limitation for David L. Johnson, Chairman of the Board
and Chief Executive Officer of the [Company] from 9.8% to 19.6% and
(ii) decreases the stock ownership limitation for all other
shareholders of the [Company] from 9.8% to 7.6%. The Board believes
the Bylaw amendment is in the best interests of the shareholders
because it allows Mr. Johnson to have a larger ownership stake in
the [Company], which would provide a greater incentive to Mr.
Johnson to increase the [Company's] performance and shareholder
value. One risk associated with the Bylaw Amendment is that it
helps entrench Mr. Johnson as Chairman of the Board and Chief
Executive Officer because he will have the ability to own almost
twenty (20%) of the outstanding shares of the [Company], which will
make it much more difficult for the remainder of the shareholders
to gather the necessary votes to elect new trustees or to remove
management. The Bylaw Amendment has the effect of an anti-takeover
measure because it reduces even further the percentage that other
individual shareholders can acquire to mount a potential takeover."
Specifically, in your Proxy section entitled Proposal One, you
recommend the following resolution, which was approved by the
Company's shareholders on May 8, 2001: "8.8 Limitation on
Acquisition and Ownership of Shares and Warrants. (a) In order to
guard against the concentration of ownership of Shares and warrants
or similar rights to purchase Shares to an extent which is contrary
to the requirements of the REIT Provisions of the Internal Revenue
Code, no Person other than David L. Johnson may at any time
...acquire ownership of or own, directly or indirectly ... a number
of Shares in excess of 7.6% of the outstanding shares of the
[Company] ..." You later in that section define Person as "any
individual, corporation, partnership, trust or other entity." The
question is thus very simple. Will the Board of Directors waive the
ownership limit in a situation that does not threaten the sole
stated justification for the limit for an existing shareholder to
the same extent it did for another shareholder, Mr. Johnson? Or,
was the Proxy correct in the result of entrenching Mr. Johnson,
even if the goal in the Proxy of maintaining REIT status should
perhaps instead be the goal of entrenching Mr. Johnson? In other
words, as you well know, it is possible to have certain owners own
in excess of the artificial limit without jeopardizing your REIT
status. We look forward to your prompt reply and approval.
Sincerely yours, MERCURY REAL ESTATE ADVISORS LLC David R. Jarvis
Malcolm F. MacLean IV Managing Member Managing Member DATASOURCE:
Mercury Real Estate Advisors LLC CONTACT: Malcolm F. MacLean IV of
Mercury Real Estate Advisors LLC, +1-203-769-2980 Web site:
http://www.mercuryrealestate.com/
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