For Immediate Release
PRESS RELEASE
OSBORNE STRENGTHENS POSITION IN ATTEMPT TO OBTAIN
THREE OF NINE BOARD POSITIONS
Cleveland, Ohio-March 13, 1995 - Rick Osborne, a Mentor, Ohio businessman,
announced today that the fund he manages has purchased an additional 725,0000
shares of First Union Real Estate Equity and Mortgage Investments, a Cleveland,
Ohio based real estate investment trust. Mr. Osborne's fund, before the
acquisition, was the largest shareholder of First Union. It now owns 1,690,500
shares, or 9.3% of all shares. In announcing the purchase, Mr. Osborne stated,
"Despite my grievances with management, the purchase of this stock is further
evidence of my ongoing commitment to the Trust and all of its shareholders and
my belief in the underlying values of the Trust's real estate."
Mr. Osborne stated that, "I have become increasingly convinced that
the present management only gives lip service to shareholders." He further
noted that, "Management continues to reward itself with rich stock options and
stock grants while the performance of the Trust lags way behind the market.
Since the end of 1989 the value of the all REIT average increased approximately
50%, but First Union fell by approximately 35%. If that is not bad enough, they
are spending outrageous sums of shareholder dollars on high-priced lawyers
pursuing senseless litigation that cannot benefit the shareholders in any way
and is only aimed at silencing the voice of its largest shareholder." Mr.
Osborne added, "I am committed to making this Trust work for all of its
shareholders."
According to Mr. Osborne, First Union's Proxy Statement says that
officers and trustees, as a group, own less than 2% of the stock of First
Union. Mr. Osborne said, "It is curious that the officers and trustees don't
have enough confidence in the Trust to own its shares." He then emphasized that
it is time to have shareholder advocates on the Board. He reported that only
three of the nine board members stand for election this year and that The
Committee to Unlock the Value of First Union Real Estate Investments seeks his
election along with the election of Steven A. Calabrese, a prominent Cleveland
real estate professional, and James R. Webb, a renowned expert in the area of
real estate use and value. Mr. Calabrese, through a partnership of which he is
a managing partner, is a member of Mr. Osborne's fund and is the owner of an
additional 17,000 shares of the trust.
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Finally, Mr. Osborne condemned in no uncertain terms the tactics of
First Union in denying him the shareholder list or even federally mandated
mailing rights so that he could communicate with the shareholders. Mr. Osborne
said, "Evidently, management of First Union is intent on denying shareholders
their legitimate voting rights. Management has for so long neglected its
shareholders. Now they won't even let them vote. There is only so long that the
management and the trustees will be able to prevent my discussion with the
shareholders. Sooner or later, the Court will hold them accountable for their
outrageous conduct. Have these people forgotten that they are fiduciaries and
have a duty to the Trust's shareholders?"
Mr. Osborne concluded by condemning the trustees and management for
enmeshing the trust further into litigation. He said, "The litigation commenced
by First Union against myself and other defendants proceeds at breathtaking
speed even though the suit is groundless and could not, by anyone's wildest
imagination, benefit the shareholders. Now that the Wolsteins have sued the
Trust for substantial damages, it is time for all the trustees to wake up and
see the damage that is being done to this Trust." Mr. Osborne said, "If this is
the way this Trust works for its shareholders, it is no wonder that it so
underperforms REITs as a group."
For more information contact:
Richard M. Osborne at 216-951-1111,
or his proxy solicitors,
Beacon Hill Partners at 1-800-755-5001.
