Blackwells announces lawsuit against Global Net Lease, Necessity Retail REIT

Blackwells Capital announced the filing of a complaint in Maryland state court against Global Net Lease (GNL) and The Necessity Retail (RTL). The lawsuit was filed in response to each company’s rejection of Blackwells’ director candidate nominations. Jason Aintabi, CIO of Blackwells, said "The Boards of GNL and RTL are grasping at straws to keep stockholders from having a voice in the direction of these public companies. 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 with its sordid bidding. Under the stewardship of AR Global, GNL and RTL have seen their share prices decline by negative 61% and negative 57% respectively, and have dramatically underperformed the U.S Diversified REIT Index returns by 110% and 71% respectively. During the same periods, AR Global collected a jaw-dropping $838 million dollars in compensation, fees and general and administrative expenses from the companies. While market capitalization at GNL and RTL have gone down in excess of $3.3 billion dollars. It is of little wonder that AR Global is now fighting against stockholder democracy with such zest to protect their golden geese." In July 2022, GNL and RTL, along with Healthcare Trust, Inc. and New York City REIT, Inc., four entities externally managed by AR Global, amended their respective bylaws to state that the Boards shall have "up to" two "managing directors" – meaning individuals designated by AR Global. Although the bylaw amendments plainly set a maximum number of "managing directors" rather than a minimum number, GNL and RTL now want to interpret them as providing AR Global and its affiliates with sole and exclusive discretion to appoint two directors to the Boards, effectively trampling stockholders’ rights. The time has come for Nicholas Schorsch and AR Global’s seedy game of corporate piracy and boardroom shenanigans to end. And if it takes a lawsuit to force them to that point, so be it. Their continued self-enrichment in the face of disastrous shareholder returns is, in and of itself, an affront to basic corporate responsibility. When adding the long history of alarming behavior connected with AR Global, AR Capital and Mr. Schorsch to the Companies’ febrile attempt to dismiss Blackwells’ nominees – who are committed to resolving the significant governance and underperformance issues at GNL and RTL – the result is a slap in the face of all stockholders." Blackwells calls on GNL and RTL to immediately accept its nominations and end the value destructive entrenchment of their External Manager, AR Global, so that this conflicted and deplorably performing enterprise is forced to face what they know is enemy number one: the ballot box.