Blackwells Capital LLC proxy war with AR Global continues, Investor claims “Extreme Underperformance”

According to the DIWire this week, Blackwells Capital LLC, an activist investor, reportedly filed a preliminary proxy statement to attempt to replace AR Global (Formerly American Realty Capital) as the external manager of the Necessity Retail REIT (formerly known as American Finance Trust).  

According to the proxy statement, Blackwells Capital, one of the largest stockholders in the Necessity Retail REIT, believes that the Board is failing to “modernize the Company’s governance,” “extreme underperformance and mismanagement.” 

This comes after Blackwells Capital filed a similar proxy statement on December 5, 2022, to replace AR Global as the external manager of Global Net Lease (GNL), formerly known as American Realty Capital Global Trust inc. 

In October, Blackwells reportedly nominated candidates for GNL and Necessity Retail REIT claiming changes need to be made due to the board’s “total disregard for governance norms that would otherwise protect shareholders.” 

American Finance Trust (AFIN) – The Necessity Retail REIT – Investor Lawsuits

The Necessity Retail REIT (American Finance Trust), currently listed on the Nasdaq, is focused on managing and acquiring a high-quality single and multi-tenant portfolio that is service-retail focused, according to its website.    

In January 2022, American Finance Trust reportedly purchased $1.3 billion in shopping centers from non-traded REIT CIM Real Estate Finance Trust and changed its name to the Necessity Retail REIT.   See American Finance Trust Renamed “The Necessity Retail REIT” 

The White Law Group continues to investigate potential securities claims involving broker dealers who may have improperly recommended an in investment in American Finance Trust and other AR Global REITs. The firm has filed numerous suits on behalf of investors who have suffered investment losses due to non-traded REIT recommendations by their brokers. 

American Finance Trust (AFIN) announced in June 2018 that it had conducted a 2-1 reverse stock split and changed its common stock to Class A common stock as part of its “phased liquidity plan,” which was intended to reduce prospective selling pressure immediately following the listing of AFIN’s Class A common stock on the NASDAQ.   

AFIN opened on the Nasdaq at $13.15 per share and closed at $15 per share, on July 18, 2018. On Oct. 14, 2018, the REIT’s stock price closed at $14 per share, 40 percent lower than its net asset value of $23.56 per share.    

According to Yahoo Finance, Necessity Retail REIT (RTL) shares closed yesterday at $6.51 per share. 

The trouble with non-traded REITs is that they are complex and inherently risky products.   Lack of liquidity is often problematic for many investors.  Investors looking to sell often have difficulty finding a buyer and can suffer significant losses on the sale.    

Broker dealers are required to inform clients of the risks associated with investment recommendations and to ensure that those recommendations are suitable for the investor based on the investor’s age, risk tolerance, net worth, and investment experience. Firms that fail to do so may be held responsible for any losses.   

If you suffered losses investing in American Finance Trust, the securities attorneys at The White Law Group may be able to help you. To speak to a securities attorney about the potential to recover your investment losses, please call the offices of The White Law Group at 1-888-637-5510 for a free consultation.   

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.   

For more information on The White Law Group, visit www.whitesecuritieslaw.com.