NexPoint Comments on United Development Funding IV (UDF IV) Annual Meeting

In This Article:

Declines to Appear at Annual Meeting, Calls for Adjournment of Meeting Until UDF IV Provides Proper Disclosure on Recently Announced Merger with Ready Capital

DALLAS, Dec. 10, 2024 /PRNewswire/ -- NexPoint Real Estate Opportunities, LLC (together with its affiliates "NexPoint") today announced it will not appear nor vote any proxies at the United Development Funding IV ("UDF IV" or the "Company") Annual Meeting of Shareholders ("Annual Meeting") being held today, December 10, 2024.

NexPoint remains concerned about the Company's planned acquisition by Ready Capital (NYSE:RC), which UDF IV announced last week in an apparent attempt to influence today's vote at the Annual Meeting. Not only does the timing of the merger announcement – made just eight days before the Annual Meeting – raise questions about the Company's motives, but there are also critical disclosures omitted from the transaction communications, making it impossible for shareholders to properly evaluate the proposed transaction with Ready Capital. The Company continues to incorrectly suggest that by voting for NexPoint's nominees, shareholders are effectively voting against the proposed merger. UDF IV is thus enticing shareholders with the prospect of a potential liquidity event – with severely inadequate disclosures – at the expense of focusing on the election of the board and the establishment of proper governance and accountability. Notably, the Company's own actions have caused years of illiquidity, which the Board is now wielding as a sword to manipulate shareholder voting.

NexPoint commented on the Annual Meeting:

"If UDF IV insists on making this Annual Meeting and board election a referendum on the potential merger with Ready Capital, then NexPoint calls for the Company to adjourn the meeting until full and proper disclosure can be provided.

We believe the Board timed the merger announcement to manipulate the vote with meager disclosure – particularly in light of the Company's false narrative that a vote for NexPoint is a vote against the merger. To be clear, if elected, NexPoint's nominees will evaluate the merger and make a recommendation in the best interests of UDF IV shareholders.

Despite merger discussions existing for months, UDF IV has given shareholders minimal time and inadequate, scant information to evaluate the proposed transaction or the acquiring company and now feel pressured to accept this outcome; in fact, that has become the case, with certain shareholders switching their votes since the merger announcement.


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