This post was originally published on this site
https://i-invdn-com.investing.com/news/LYNXMPEBBR0PM_M.jpg
NEW YORK (Reuters) – Blackwells Capital, a hedge fund seeking to replace some of the board directors at Global Net Lease (NYSE:GNL) Inc and Necessity Retail REIT Inc, told Reuters on Monday it has filed a lawsuit against the real estate companies after being blocked from putting its own board nominees forward.
Blackwells wants both companies to replace AR Global, the external manager of their properties, over what it argues are high costs and poor performance. It wants to nominate two directors at each company to ratchet up the pressure on them.
The lawsuit filed on Monday in Maryland state court accuses the real estate investment trusts (REITs) of using recently amended bylaws to block Blackwells’ nominees and reserve the board seats for AR Global.
“By relying on a guileful interpretation of recent bylaw amendments, and by fabricating other pretexts to reject our valid nomination notices, these Boards seem to be acting only as marionettes to help AR Global,” Blackwells founder Jason Aintabi said in a statement.
The companies did not immediately respond to requests for comment.
Blackwells is not the only activist investor that has contested bylaw changes at companies this year. Politan Capital recently sued healthcare company Masimo (NASDAQ:MASI) Corp. over bylaw amendments that the activist claimed were used as a pretext to block board nominations.
Blackwells is seeking to improve corporate governance at the two REITs, end the relationships with AR Global, and spur a review of strategic alternatives, Reuters reported in October.
GNL has a market capitalization of about $1.4 billion, while Necessity Retail REIT is valued at roughly $821 million. Over the last five years, GNL and Necessity Retail REIT have lost roughly half of their value.
