The board of Owens Realty Mortgage has urged stockholders to vote for the company’s director nominees in light of a challenge from The Hovde Group.
The company recently received a call to liquidate itself from investor Freestone Capital Management, which slammed management for “questionable decisions” and its “continued destruction of shareholder value.”
Now it is facing board competition from The Hovde Group, which has nominated Steven Hovde and James Hua to the Owens board. Meanwhile, the company has nominated Bryan Draper and James Kessler as directors.
In its letter to shareholders, the Owens board also refuted certain claims by The Hovde Group. The board said that contrary to Hovde’s assertions, it has actually delivered outstanding returns over the past five years. Since the company's public listing as a REIT, it has delivered an 87% total stockholder return.
“Do not be fooled by the Hovde Group's use of financial data that goes back 10+ years,” the board wrote. "The Hovde Group appears to be using this timeframe to cherry-pick financial results from an industry-wide financial crisis to misleadingly distract stockholders from our outstanding returns since our stock has been able to appreciate on a public exchange.”
Additionally, contrary to Hovde’s claims, the Owens board said that the company continues to pay consistent and increasing dividends. The board also said that Hovde is misrepresenting the fees paid to Owens’ external manager. The board said that it recently negotiated a permanent reduction in the fees paid to the external manager, adding that the fees are received as gross revenue and not net income.
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