Marketwire
TORONTO, ONTARIO--(Marketwired - Oct. 18, 2013) - Early this afternoon, the trustees of Partners Real Estate Investment Trust (the "REIT" or the "Trust") (TSX:PAR.UN)(TSX:PAR.DB)(TSX:PAR.DB.A)(TSX:PAR.DB.B) were informed that League Assets Corp. ("League") and a number of related entities, including LAPP Global Asset Management Corp., the external manager of the REIT (the "Manager"), have sought protection under the Companies' Creditors Arrangement Act (Canada) (the "CCAA").
If the court grants the form of protective order requested by League (the "Order"), the REIT does not expect the day to day operations of the REIT to be affected and will take all necessary steps to ensure that this is the case. While the management agreement between the REIT and the Manager (the "Management Agreement") remains in place, the Manager will continue to carry out the management and administration of the REIT without any change that we are aware of at this time. We have been informed by the Manager that it is the intention of the Manager to do so.
As previously announced, the REIT is in the process of internalizing management and as a result believes that if the Manager is unable or unwilling to perform its obligations under the Management Agreement, that the REIT will be able to employ many of the individuals currently working for the Manager on the business of Partners, would have access to all records and be able to carry on normal operations.
The Order, if granted, would prohibit the termination of any agreements with the Manager without the consent of the petitioners and PricewaterhouseCoopers Inc., who is proposed as the court appointed Monitor, or unless leave of the court is obtained.
As a result, if the Order is granted as proposed, the Order would restrict the REIT's ability to terminate the Management Agreement for any reason during the currency of the Order, including in order to internalize management, without the leave of the court, or without the consent of the petitioners and the Monitor. If the trustees believe it is in the best interests of unitholders to terminate the Management Agreement, for any reason, they will seek that consent or will seek the leave of the court to allow the trustees to do so.
The REIT notes that one of the parties covered by the proposed Order is IGW Public Limited Partnership, the largest unitholder of the REIT. It is the REIT's understanding that IGW holds approximately 14.95% of the units of the REIT.
Appointment of Special Committee
The REIT also announces that a special committee comprised of the independent trustees of the Trust, and chaired by James Bullock, has been appointed. That committee's mandate is to (A) evaluate the strategic alternatives that may be available to the Trust at this time to enhance unit holder value include, without limitation, entering into strategic alliances, the sale of all or some of the assets of the Trust, the purchase by others of some or all of the outstanding Units of the Trust, including by existing major shareholders, the issuance of Units of the Trust from treasury to others in exchange for either cash or non-cash consideration, and the recapitalization of the Trust to enable additional acquisitions and the internalization of management of the Trust, and (B) to evaluate the impact on the Trust of the League CCAA filing and to take all action the Special Committee thinks is necessary or desirable as a result of that filing.
Neither the Toronto Stock Exchange nor Market Surveillance (as that term is defined in TSX Company Manual) accepts responsibility for the adequacy or accuracy of this release.