SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No. )
Filed by the registrant |_|
Filed by a party other than the registrant |X|
Check the appropriate box:
|_| Preliminary proxy statement |_| Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
|_| Definitive proxy statement
|X| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
First Union Real Estate Equity and Mortgage Investments
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(Name of Registrant as Specified in Its Charter)
Gotham Partners, L.P.
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(Name of Person Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
For Immediate Release
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Contacts: Bill Ackman or George Sard/David Reno
David Berkowitz Sard Verbinnen & Co
Gotham Partners (212) 687-8080
(212) 286-0300
GOTHAM PARTNERS DENIES IT IS IN
DISCUSSIONS WITH FIRST UNION REAL ESTATE
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GOTHAM SAYS FIRST UNION BOARD HAS FIDUCIARY DUTY TO ALLOW SHAREHOLDERS
TO DETERMINE COMPANY'S FATE AT MAY 19 SPECIAL MEETING
New York, April 20, 1998 -- Gotham Partners, L.P. today announced
that, contrary to false and misleading statements by First Union Real
Estate Investments (NYSE:FUR), Gotham is not engaged in any discussions
with the First Union Board of Trustees or management or a recently formed
special committee of the Board. Gotham is one of First Union's largest
shareholders.
On Friday April 17, First Union issued a press release claiming it
had formed a special committee of its Board to evaluate alternatives for
the company, retained Credit Suisse First Boston in an expanded capacity to
assist in that process, and stated that the committee has been talking to
Gotham and other large First Union shareholders who support Gotham's
proposals. Gotham has had no contact with the committee except for one
discussion with a committee member several weeks ago. In that discussion,
Gotham refused to entertain any settlement proposal that did not give it
the right to immediately designate a majority of the members of the Board.
There is no current dialogue between Gotham and the committee or the
Company, other than in connection with court proceedings.
First Union's announcement provides no details as to how Credit
Suisse First Boston's role has been expanded. If Credit Suisse First Boston
is seeking an acquirer for the Company, Gotham urges the Company's
independent trustees to reject any alternative involving a forced sale of
First Union at a small premium to current market value. In light of the
uncertainty associated with the Company's paired-share structure, the
deteriorating financial performance of the Company under current
management, and the hurried nature of a sale in such close proximity to the
May 19 special meeting of shareholders (at which Gotham expects that its
nominees will be elected to a majority of the seats on the Company's
Board), Gotham believes now is the wrong time to sell.
In Gotham's view, the Company's current trustees owe a fiduciary duty
to shareholders to permit them to determine the course of the Company at
the May 19 shareholder meeting.
Gotham continues to believe that the only way for First Union
shareholders to attain maximum value for their shares is to vote in favor
of Gotham's proposals at the May 19 shareholder meeting. Among other items,
Gotham has proposed an alternative slate of directors which intend to make
changes in the senior management and business plan of First Union.
BACKGROUND
Gotham has been a shareholder of First Union since 1996. On July 14,
1997, Gotham sent a letter to the First Union Board of Trustees expressing
its strong concerns about management and the strategic direction of the
Company and requesting a meeting with the Board of Trustees. The First
Union Board of Trustees refused and despite numerous subsequent efforts by
Gotham has continued to refuse to address Gotham's concerns.
As a result, Gotham is soliciting proxies to replace the entire class
of three First Union Trustees up for election at the May 19 meeting, which
includes First Union chairman and chief executive officer James C.
Mastandrea, with Gotham nominees William A. Ackman and David P. Berkowitz,
both principals of Gotham Partners, and James A. Williams, chairman of
Michigan National Bank. Gotham is also proposing to increase the size of
the First Union Board of Trustees from nine members to 15 members and to
fill the six new seats with Gotham nominees. If all of the Gotham proposals
are approved by First Union shareholders and its nominees elected, the
Gotham nominees would hold nine of the 15 seats on the First Union Board.
Under court order, First Union is required to hold a shareholder
meeting on May 19 in lieu of its 1998 annual meeting, which was originally
scheduled for April 14, 1998 but was cancelled by the Company. The court
has also ordered First Union not to provide any new employment benefits or
compensation outside the ordinary course of business and has prohibited
First Union from any transfer of assets not for fair market value prior to
the election and seating of directors.
Gotham Partners is a private New York investment partnership. First
Union is a stapled-stock real estate investment trust (REIT).
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