UDF IV Mails Letter to Shareholders Regarding 2024 Annual Meeting
26 Julio 2024 - 7:30AM
United Development Funding IV (“UDF IV” or the “Trust”) mailed a
letter to update shareholders on the imminent mailing of the
Trust’s proxy materials related to the 2024 Annual Meeting of
Shareholders (the “Annual Meeting”) to be held later this year and
to reiterate its concerns regarding NexPoint Real Estate
Opportunities LLC and its affiliates’ (collectively, “NexPoint”)
campaign to elect a slate of dissident trustee nominees at the
Annual Meeting.
UDF IV will provide additional information
regarding the Annual Meeting and the election of trustees to the
UDF IV Board in the proxy materials, which are expected to be
mailed in the coming days. The Trust urges shareholders to wait to
vote on the WHITE proxy card included in the UDF
IV proxy materials, and discard any green or other color proxy card
sent to you by NexPoint.
The letter to shareholders and other important
information regarding the Trust’s commitment to value creation can
be found at
UDFforShareholders.com.
The full text of the letter to shareholders
follows:
Dear UDF IV Shareholder,
You may have recently received a
letter and proxy voting materials from NexPoint Real Estate
Opportunities, LLC and its affiliates (collectively, “NexPoint”)
regarding its dissident trustee nominations at the 2024 Annual
Meeting of Shareholders to be held later this year. We urge
shareholders to take no action at this time – do not fill out and
return the GREEN proxy voting card provided by
NexPoint.
NexPoint’s materials include claims
that are grounded in misinformation and intended to distract from
the actions we’ve taken to position the Trust to drive long-term
value for the benefit of all shareholders. Further, we believe
NexPoint is rushing out its proxy materials in an attempt to
pressure shareholders into supporting its self-interested campaign
before they have the opportunity to receive and review United
Development Funding IV’s (“UDF IV” or the “Trust”) proxy
statement.
We are finalizing our proxy materials
and expect to mail them to shareholders in the coming days. We will
also post them on UDFforShareholders.com.
We urge shareholders to wait to vote on the
WHITE proxy card that will be included in
UDF IV’s proxy materials to support the UDF IV Board of Trustees
(the “Board”) and management team that are taking action to protect
your investment.
The unfortunate truth is that for the
last 5+ years, NexPoint has attempted to take over management of
the Trust, causing significant disruption to the Trust’s operations
and coming at the expense of shareholders’ hard-earned dollars.
- In 2020, NexPoint launched
a hostile tender offer, which it extended 13 times, to purchase
Trust shares at the bargain basement price of $1.10 per share, or
approximately a 90% discount to the Trust’s book value per share at
the time.
- NexPoint has launched
numerous frivolous lawsuits against the Trust – including a
defamation suit – forcing the Trust to spend resources that could
otherwise be used for the benefit of shareholders.
Additionally, NexPoint’s principals –
including its founder, James Dondero – have engaged in a litany of
actions that create considerable cause for concern regarding their
integrity, character and willingness to do right by the investors
they claim to represent.
It is clear from NexPoint’s
latest letter that they have no viable plan to enhance value for
UDF IV shareholders. Their materials reinforce our belief that
NexPoint’s true motivation behind its proxy contest is to extract
the value of the Trust’s portfolio for themselves to the detriment
of all other shareholders. In addition, NexPoint’s slate of
nominees includes three close affiliates of NexPoint and / or James
Dondero. We believe that NexPoint’s nominees’ sole focus will be to
advance the hedge fund’s self-interested campaign.
Despite NexPoint’s persistent
attempts to undermine the Trust, the Board and management team have
acted, and continue to act, to protect and promote the interests of
the Trust’s shareholders.
- The Board has paid cash
distributions of approximately $38
million, or approximately $1.24 per share, to
shareholders since reinstating distributions in the third
quarter of 2019 – far more than the $1.10 per share NexPoint
offered to pay shareholders for their Trust shares. Cash
distributions paid since inception total approximately $186
million, equating to approximately $6.06 per share.
- The Trust has continued to
actively and professionally manage its portfolio, including
originating 9 new loans since 2020, committing to lend over $70
million in total. Importantly, 8 of these loans funded new phases
of projects for which the Trust has current loans in its portfolio,
which we expect will accelerate the completion of these
existing projects.
- The Trust maintains
transparent communication with shareholders and recently
mailed its annual letter to shareholders and audited financial
statements for the year ending December 31, 2023 to all
shareholders. These materials are also available at
UDFforShareholders.com.
We will provide additional
information regarding the 2024 Annual Meeting of Shareholders and
the election of members of the Board of Trustees in the proxy
materials that we expect to mail in the coming days. Please
wait to vote on the WHITE proxy
card included in the UDF IV proxy materials, and discard any green
or other color proxy card sent to you by NexPoint.
These proxy materials and other
important information related to the 2024 Annual Meeting of
Shareholders will be made available to shareholders at
UDFforShareholders.com.
We thank you for your investment and
continued support of UDF IV.
Sincerely,
The UDF IV Board of Trustees
If you have any questions or require any
assistance voting your shares, please contact our proxy
solicitor:
INNISFREE M&A
INCORPORATEDShareholders may call:1 (877) 750-9496
(toll-free from the U.S. and Canada)+1 (412) 232-3651 (from other
countries)
About United Development Funding
IV
United Development Funding IV is a Maryland real
estate investment trust. UDF IV was formed primarily to generate
current interest income by investing in secured loans and producing
profits from investments in residential real estate. Additional
information about UDF IV can be found on its website at
www.udfiv.com. UDF IV may disseminate important information
regarding its operations, including financial information, through
social media platforms such as Twitter, Facebook and LinkedIn.
Forward-Looking Statements
This letter contains forward-looking statements
relating to, among other things: UDF IV’s 2024 Annual Meeting of
Shareholders and proxy materials for the meeting, UDF IV’s
expectations regarding certain projects for which the Trust has
provided funding and positioning the Trust to drive long-term value
for the benefit of all shareholders. These forward-looking
statements are based on management’s current expectations and are
not guarantees of future performance or future events. Such
forward-looking statements generally can be identified by our use
of forward-looking terminology such as “may,” “will,” “expect,”
“intend,” “anticipate,” “estimate,” “believe,” or other similar
words. Readers should be aware that there are various factors, many
of which are beyond UDF IV’s control, which could cause actual
results to differ materially from any forward-looking statements
made in this correspondence including, among others: changes in
general economic conditions the real estate market and the credit
market and changes in interest rates. Accordingly, readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this correspondence.
Forward-looking statements in this document speak only as of the
date on which such statements were made, and UDF IV undertakes no
obligation to update any such statements that may become untrue
because of subsequent events.
Investor Contact:Investor
Relations1-800-859-9338investorrelations@umth.com
Media Contact:Mahmoud Siddig /
Lucas PersJoele Frank, Wilkinson Brimmer Katcher(212) 895-8668