Go Orange Capital LLC ! Re: Partner’s REIT

May 7th, 2014 · 17 Comments · League REIT Updates, Partner's REIT Updates

Drops On Bright Orange Flower
A Guy Taking Pictures / Foter / Creative Commons Attribution 2.0 Generic (CC BY 2.0)

This morning brought me news of attempted malfeasance at Partner’s REIT. The Interim CEO Ron McGowan packed up his toys and went home. resigned. Here is the list of allegations by Orange Capital LLC.

I don’t think it’s a coincidence that League Assets is in CCAA and that the other company formerly run by Adam “Value Destroyer” Gant and Emanuel “Don’t Know The Numbers” Arruda has a culture of going along to get along and looking the other way when ethics violations are in play.

Orange Is Calling For An Independent Forensic Audit

From what I’ve learned observing League and their unwinding. Here’s what they should be looking for and at.

  1. Building Valuations and Appraisals
  2. Inappropriate Loans with excessively high interest payments that benefit related parties.
  3. Intercompany loans
  4. Excessive Leverage
  5. Mortgages and then second and third mortgages.
  6. Non arms length transactions
  7. Understated vacancy
  8. General bad building performance
  9. Neglect and lack of fiduciary responsibility
  10. Lack of maintenance and basic building care

The same sickness and ineptitude coupled with bad practices in building management that were responsible for the League failure must have also been reflected at Partner’s REIT. There is evidence of that, the revolving door of staff, the loans to League that would get paid back before the quarter was up, the hiring and firing of the trustees, poor governance at LAC, and the subsequent announcement that Partner’s would be hiring from the freshly fired employees that worked at League. All point to a culture of deceit and dishonesty.

If Partner’s is to survive it’s well past time for a “Come To Jesus” with new governance and new focus on asset performance. That is how REIT’s make money. They buy assets and lease out all the space and upgrade their assets.

I for one do not believe their latest financial statements with their claims of 100% occupancy of most of their assets. I just don’t believe that Adam “Value Destroyer” Gant and Emmanuel ” Don’t Know Numbers” Arruda were capable of that kind of governance at Partner’s REIT while completely stripping all the assets at League of any equity and neglecting their buildings to the point of unleasability. The League mall in Langley that was recently sold had a 28% occupancy rate or a 72% vacancy rate.  I don’t even know how that’s possible.

Partner’s REIT needs to rise from the ashes, but it will be a long time before these buildings get turned around and perform the way they should. For now I commend Orange. I really really do. Know you are awesome.

Trustee  Lindsay Weiss gets the hell out of dodge a mere 27 days after taking the job of trustee on.

Then poor little Partner’s REIT was pressured into taking money from big bad Orange and Orange is even calling them daily. Whew sounds really hard.

A forensic audit is well overdue at Partner’s REIT and may well find it already insolvent but if there is any hope of saving the company, hard truths must be realized. After all how do you work on a problem that you refuse to admit exists?


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17 Comments so far ↓

  • Dennis

    Before you commend an Orange you better make sure you are eating the right Orange. Shame!

  • Dennis

    Translation: that awesome Orange that you really, really like is not Orange Capital Partners! Wrong link.

  • Cherry

    Seems to be a bit of confusion between Orange Capital LLC ( the one involved with Partners RIET) and Orange Capital Partners, a completely different entity. I’m surprised that they would be allowed to have such similar names.

  • Cherry

    Sorry, I meant ‘REIT’ of course.

  • Rachelle

    Ok well weirdly Orange Capital the hedge fund does not feel the need to have a website… so I’ll remove the other link.

    • Dennis

      They do have a website. More importantly, after your efforts to protect investors in the League saga with your “from the hip style”, I am shocked that you would commend a hedge fund ( more appropriately a vulture fund) that has the ability to short stock. After buying minimum stock in a company they must decide whether their nominees to the board will work to enable the company to fail or succeed. A choice of failure would entail shorting the stock to profit handsomely.

      Using your logic in the League scenario, how would that work out for investors? Orange is not obligated to disclose when they are shorting the stock as it heads for failure.

      Your commendation seems rather misplaced and should possibly be withdrawn upon some research.

      • Rachelle

        Yeah, you’re right but I have to commend the vulture fund, because they happen to be the more honest party in this scenario. Anyone can short a stock.

        Feel free to link to the Orange Capital LLC site, I can’t find it.

  • Jimmy

    The issues at stake arose after League sold all of their stock as part of the CCAA process. There is no relationship at all here between Partners and League or Gant.

    The shoot from the hip style makes has recently caused several of these types of inaccurate posts to be made. It would be nice if you apologized every once in a while.

  • Dennis

    Where is the relevance to Orange Capital or Partners REIT ? Neither is related to League.

  • Rachelle

    So the exact same jokers that ran League group into the ground also ran Partners REIT. There was an instance where the board of Trustees tried to kick out the manager because they were trying to buy non arms length assets. Then there was a proxy battle after which all those allegation making trustees were fired/left but the Manager (League) stayed. There is the PWC report that discusses the complete lack of fiduciary responsibility and lack of records. Then as soon as a new CEO steps in he buys some non arms length run down shopping malls for an overvalued sum. Then he gets caught and steps down. Are you a fucking idiot ? Does this pattern if behaviour seem coincidental to you? Everything about Partner’s REIT stinks including the fact that they hired a bunch of League ex employees. Orange capital is right do a forensic audit figure out where the REIT is at and get competent honest governance.

    • Dennis

      Awesome Orange must be “real” f..ing idiots to be offering to buy $15 M worth of Partners after 2 months of due diligence. I would suspect that they know more about real estate and that is why you find them commendable despite knowing nothing about them.