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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
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FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] 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: ...........................................................
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FIRST UNION REAL ESTATE INVESTMENTS
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AT THE COMPANY IN CLEVELAND, OHIO IN CHICAGO IN NEW YORK
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Thomas T. Kmiecik Stanley L. Ulchaker Peter Wentz Arthur Gormley
Senior Vice President Edward Howard & Co. Dilenschneider Group Dilenschneider Group
(216) 781-4030 (216) 781-2400 (312)553-0700 (212) 922-0900
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FOR IMMEDIATE RELEASE
SHAREHOLDER ASSOCIATION RECOMMENDS
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VOTE AGAINST GOTHAM BOARD-PACKING SCHEME
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CLEVELAND, OHIO, MAY 11, 1998 -- FIRST UNION REAL ESTATE INVESTMENTS (NYSE:FUR)
today announced that it has received a copy of the vote recommendation of
Independent Shareholder Services (ISS) in First Union's proxy contest with
Gotham Partners. ISS recommends that shareholders vote against expansion of
First Union's Board and against the election of six Gotham nominees to new
seats. The report also cites the lack of a "chartered course" in Gotham's
action plan for the Company. The report concludes, "Considering the
incongruity of its action plan for the Company, ISS does not believe
shareholder interests would best be served by ceding complete control of
First Union to Gotham."
A committee of independent Trustees of First Union responds to the ISS report
by urging Gotham to accept the Committee's proposal to put representatives from
four large shareholders on the board, including one from Gotham. Russell R.
Gifford, chair of the special committee, said, "The ISS report recommends that
Gotham should have a minority position on the board, in line with its
holdings. We agree and have been trying to settle this matter by creating a
consensus board including representatives from Gotham, Apollo, Cerberus and
one other, as well as a fifth independent real estate expert, and four
existing Trustees. Gotham has rejected this idea, but we urge them to work
with us to resolve this matter in a way that benefits all shareholders,
not just one."
Mr. Gifford continued, "As the ISS report properly points out, Gotham apparently
does not want a truly independent board; we believe it just wants control of the
company, as evidenced by the fact that all nine of its director nominees are
employees, limited partners or affiliates of Gotham. This concern, and its lack
of an action plan for the Company makes us believe that Gotham has not
demonstrated it can effectively manage the Trust."
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Mr. Gifford also said, "As an association of institutional investors, ISS is
totally independent from the Company, and its report reflects a balanced view.
It praises management for 'turning the company around from its muddled state of
affairs in 1993' but also says Gotham has 'expertise in the transactional end of
the business.' But the report concludes that Gotham's contribution could be
effective from 'a minority position in line with its level of shareholdings.'
Although we believe there is evidence Gotham has overstepped the bounds of
federal and state securities laws, we also believe a board that includes
representation of several minority shareholders is in the interest of the
Company and its long-term shareholders."
Firs Union Real Estate Investments is a unique stapled-stock real estate
investment trust (REIT) headquartered in Cleveland, Ohio, and traded on the New
York Stock Exchange.
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