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DJ1 - Federal Filings Newswires (FF) STORY 27
Gotham Questions Integrity Of FUR's Ind. Committee
3146 Characters
04/24/98
(Copyright (c) 1998, Dow Jones & Company, Inc.)
ISSUER: FIRST UNION REAL ESTATE EQUITY & MORTGAGE INVESTMENTS SBI
SYMBOL: FUR
WASHINGTON (FFBN) -- First Union Real Estate Equity & Mortgage
Investments' top executives deliberately mislead its shareholders today
about potential conflicts of interest within its recently established
independent committee of trustees, according to a statement released
by dissident shareholder Gotham Partners L.P.
First Union chief financial officer and executive vice
president denied during a conference call today that Russell Gifford,
the head of the independent committee, was recently named chief
executive of Van Tek, a subsidiary of the firm's Imperial Parking
operation. When questioned further about the position held by Gifford,
chairman Jim Mastandrea replied that he is an "unpaid consultant" for
Van Tek.
Gotham cites Imperial Parking's documents as evidence to the
contrary: According to an article posted on the firm's web-site,
Gifford was named the chief executive of Van Tek on March 1.
"Mr. Mastandrea's outright lies to shareholders on this most
recent conference call are reprehensible," Gotham says, adding that his
dual role as chief executive and head of the committee presents him with
"disabling conflict of interest."
As reported, First Union established the special committee
earlier this month to look at ways to maximize shareholder value
following mounting pressure from Gotham, who is seeking majority control
of the board.
First Union revealed in the conference call that Van Tek lost
approximately $1 million in the first quarter of this year, contributing
to First Union's 55% decline in funds from operations, according to
Gotham. First Union's alleged overpayment for Van Tek's parent,
Imperial Parking, has served as a cornerstone in Gotham's argument that
Mastandrea's management team is unable to run an acquisition intensive
business.
First Union failed to mention Gifford's position at Van Tek in
the proxy materials that it mailed to shareholders in connection with
Gotham's fight for board control, leading it to believe that the firm's
"Securities & Exchange Commission filings are materially false and
misleading."
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(END) FEDERAL FILINGS-DOW JONES NEWS 04-24-98 17:50
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