Caught Again! Proxy Trickery At Partner’s REIT

July 6th, 2014 · 14 Comments · Partner's REIT Updates, REIT

The Poop Monster

EDIT: Actually this entire post is wrong. I made a mistake. It happens :-) I missed the news that Orange Capital withdrew all their nominees for Trustees. I have no idea why they did so after going to court and winning the right to put those nominees forward, but there you have it. I apologize for being a dick.

Earlier today the ever vigilant Allison Barber caught this piece of news. Make sure you read this analysis all the way through.

Partners REIT Announces ISS Recommendation: Unitholders Should Vote FOR All Trustee Nominees and Resolutions  

Partners Real Estate Investment Trust (the “REIT” or “Partners”) (TSX:PAR.UN) announced today that Institutional Shareholder Services (“ISS”) has recommended that its clients vote FOR all of Partners’ Trustee nominees for election at the REIT’s upcoming Annual and Special Meeting, to be held on July 15, 2014. ISS also recommended that unitholders vote FOR the Unitholder Rights Plan and approve KPMG LLP as auditor.

ISS is a leading independent international corporate governance analysis and proxy voting firm, whose recommendations are intended to assist unitholders in making choices regarding proxy voting decisions. In making its recommendation, ISS met with the REIT, carefully considered the nominees and details of the proposals put forward and recommended on the basis of what it believes is in the best interests of unitholders. The Board of Trustees is pleased to have received this important endorsement from an independent third-party.

The Trustees have taken decisive action to protect and enhance unitholder value and the REIT is well on its way to a brighter future. The Board’s immediate focus is on completing a search for a new permanent CEO and the ongoing strategic review of the REIT. To ensure unitholder votes are voted at the upcoming Meeting, the Board recommends that unitholders cast their vote on the YELLOW proxy in advance of the July 11, 2014, 1 p.m. (Toronto time) proxy voting deadline.

Who Is ISS?

According to Wikipedia:  Institutional Shareholder Services, Inc. (ISS) is a proxy advisory firm. Hedge funds, mutual funds and similar organizations that own shares of multiple companies pay ISS to advise (and often vote their shares) regarding share holder votes. It is the largest such firm, with over 61 percent of the business[1] It is owned by MSCI.

In short Partner’s REIT paid money to ISS so they would announce their paid recommendation to vote their proxy the way the existing governance wanted. 

Here’s what they advertise as their serviceGovernance Advisory Services can be used with our turn key proxy voting to ensure complete control of the voting decision

ISS is the corporate equivalent of getting your aunt to vouch for you on a rental application. Except you have to pay your aunt.

Landlord Rescue Announces Shareholder Misleading At Partner’s REIT & Recommends Forensic Audit

This reeks of the same corporate governance that led to the collapse of the League Ponzi Group, the same crooked corporate governance that was revealed by the trustees during the last proxy battle, a battle that was lost by the trustees who all got canned for raising serious concerns about non arms length transactions, specifically Adam Gant trying to get Partner’s REIT to buy League’s decrepit vacant properties.

In a culture of back alley deals as soon as the League scandal seemed to fade away, the purulent boil of dishonest dealings raised it’s ugly head and Partner’s REIT governance got caught pushing through a non arms length transaction. Then CEO Ron McGowan resigned after getting caught red handed with his hand in the cookie jar except it wasn’t a cookie but a half vacant, deferred maintenance mall he was getting from his business partner.

In a perfect example of why dishonesty is bad for business, obviously the share prices have been going nowhere but down as the madness continues unabated. You’re a REIT for god’s sake not a soap opera. All you have to do is improve your buildings, pay the mortgages and distribute income, this is not a complicated business plan. As for the poor poor patient shareholders, the best thing to do is the complete opposite of what this board wants. This is the board that has seen your share prices lose 37% of their value.

ISS is just one more useless company that provides no value to this debate except to provide Partner’s REIT with an “Appeal To Authority” for shareholders. Shareholders don’t know that the official sounding ISS is just another PR stunt paid for reference. This type of trickery was seen over and over at League. One of the most effective that got a lot of people believing and investing was the “paid rating” scam or the “impressive announcement” scam.

Stop the madness!

 

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14 Comments so far ↓

  • Jimmy

    You have it backwards. Referring to the same Wikipedia article that you quoted it states that hedge funds, institutional investors, etc pay ISS for their services – not the company.

    The reason why these firms pay ISS for recommendations on how to vote proxies is that they typically own dozens of public companies and can’t be bothered researching every routine proxy that comes up. Thus they pay ISS to do the work for them.

    • Rachelle

      Actually in this case they were paid by Partner’s to help them win the proxy against Orange Capital. That is also one of their services.

  • Dennis

    Unbelievable! The League “heroes” strick again. This time they have simultaneously fallen off their soap boxes and struck their heads while searching for the elusive limelight forgetting that even dead clocks are right twice a day. Please just recognize that luck was on your side once and you will need the right stuff the next time.

    ISS is used extensively by smart money to assist in voting their many proxies. Wealth management firms are well aware that they provide a service for a fee (similar to what you charge landlords). Are you corrupt when you pay a fee for a service? Any small retail unitholder with any common sense would surely realize that ALL services are provided for a fee.

    In your search for the next “kill”, I would suggest that you choose a reasonable new target rather than constantly try to kill something that has been dead for 6 months. You are now embarrassing yourself in public.

    • Rachelle

      There’s nothing unbelievable about it. We’re just adept at spotting deception and in my case spotting malfeasance. I did more research on League than you could ever imagine before preparing my case defending their defamation claim. We were right not because dead clocks are right twice per day but because we were right in fact if you go to League Reviewed website you will find that I called their bankruptcy down to the month using simple math.

      I’m sure ISS has many useful services but in this case Partner’s REIT is trying to influence shareholders using an appeal to authority instead of actually doing anything to improve shareholder value. This is the same board of trustees that oversaw the non arms length transaction with Holyrood.

      I’m not sure what you mean when you say “luck” was on my side. Fuck you, how would you like to know in no uncertain terms that 4000 people were going to lose their money? How would you like to be sued in the BC Supreme Court? How would like it if your ethics compelled you to do your best to fight lies and deceit to save future victims? How would you like to hear thousands of hours of stories about lives being devastated by Adam Gant and Emmanuel Aruda and their cronies? Luck, I don’t think so.

      Don’t ever come to this blog and threaten me again. I’ve actually read Partner’s REITs financial statements and I actually know exactly what the problem is with that company. I would suggest that people who live in glass houses should not throw stones. If anyone still thinks that I can be intimidated into anything, they have their head up their ass.

      Here’s the thing, I’m right and I know I’m right and you know I’m right. Just because you don’t like it doesn’t make me wrong.

      • Dennis

        Personally I have no reason to care.

        • Allison Barber

          Then why do you bother to come here?

          • Dennis

            To correct misinformation especially when it is provided by egotistical individuals who became addicted to 15 minutes of fame and can’t let go. If you had simply searched ISS Advisory prior you would have realized most of the world’s largest and most profitable companies have used their services and have never been subjected to these kind of allegations. Partners has clearly had problems in its’ past but to broadcast that engaging ISS is somehow improper is simply MISLEADING not informing.

            Your work on League was commendable, however your reputation going forward will depend on whether you can stick to facts rather than clamor for the elusive limelight. When you are out of your League, research or stay out. Misinformation will only negate your previous efforts.

      • Dennis

        Kudos on your EDIT, however the crux of your post is “proxy trickery ” ( in the title) not Orange Capital or it’s’ nominees. The question is was there proxy trickery in engaging ISS? Your replies continue to suggest that there was. Please continue editing and clarify.

        • Jimmy

          The proper thing to do would have been to delete the entire post. To your point, this is why nobody in the media or law enforcement will return their calls any more. Intermingled with the 1 or 2 useful pieces of information are 10 over the top allegations which prove to be wrong.

          • Rachelle

            Actually “erasing the post” is dishonest. I wrote it and was wrong. My errors do not disappear on this blog. This has been my policy here since the blog was first published.

            I actually did not realize that Orange Capital had withdrawn their trustees. It is a sad day for investors as they have no choice at this point.

  • Allison Barber

    I think you have it all wrong. I am not addicted to ‘fame’, and the shit I’ve been through with League has been extremely damaging to me. I know in my bones that Adam Gant still has a big interest in Partners REIT. I have watched people’s lives ruined by that unscrupulous, avaricious, thieving, lying POS. I know people who are in Partners because they were in IGW. If Gant and his puppets are allowed to continue, everything in Partners will also be lost. Before you make sweeping assumptions as to people’s motivations, that they ‘clamor for the elusive limelight’ and other such hyperbole, maybe we should comment on your motivations. Manny is very good at hyperbole

    • Jimmy

      This is what I don’t understand. By all accounts you won. League is out of business, Adam and Manny are humiliated, the lawsuit against you is going nowhere and you lost no money.

      Why are you giving Adam and Manny the satisfaction of knowing that this has consumed you?

  • Allison Barber

    Nothing is over. I am working with people who lost everything to try to recoup something. IMHO there are plenty of places to seek retribution.

  • Jimmy

    Free advice.

    You are a very good writer Rachelle and you are a very good researcher Allison. Regardless of cause, this is a very interesting story and a thousand twists and turns. Why not use your time and skills to write about it. I am sure that it would be a best seller if written in a factual, non-biased way.

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