30% of AHT shareholders call for special meeting to restore shareholder rights, preserve strategic alternatives, reports UNITE HERE

Today, UNITE HERE announced it submitted a proxy signed by 30% of outstanding shares of Ashford Hospitality Trust [NYSE: AHT] calling for a special meeting of Trust shareholders to restore their rights and preserve strategic alternatives in the context of its restructuring.

Immediately before announcing plans to convert AHT into an externally advised REIT and spin-off Ashford Inc. [NYSEMKT: AINC], AHT revoked shareholders’ rights to amend the bylaws and raised the threshold to call a special meeting from 25% to 50%.

“A sufficient percentage of shareholders has requested a special meeting, if the threshold in place last winter hadn’t been raised unilaterally by Ashford’s Board on the eve of announcing restructuring plans,” said JJ Fueser, Research Coordinator for UNITE HERE.

UNITE HERE has submitted its proxy to the corporate secretary of AHT with a demand to convene a special meeting to consider the resolutions in the notification, including bylaw amendments which would require shareholder approval before amending or revoking key shareholder rights, such as the right to elect directors annually, to make bylaw amendments, to remove directors without cause, and to call a special meeting with the support of 25% of shares outstanding.

In October, AHT restored some of the cuts it made to shareholder rights in February, but stopped short of making those improvements permanent by requiring prior shareholder approval to revoke or change them in the future. Furthermore, management’s pledge to allow a shareholder vote on declassifying the board of AINC is meaningless if insiders who control close to a majority of shares do not pledge to support the measure.

“Board members could and should make the changes proposed in the call for a special meeting right away, or call the special meeting to let shareholders vote for bylaw amendments,” said Ms. Fueser. “Moreover, the Board should act today to provide shareholders permanent rights and accountability measures before undertaking any related party transactions in the future.”

UNITE HERE is submitting the special meeting consents within the 30 day window provided by AHT bylaws. 26.83 million shares consented to the request for a special meeting, 21.98 million voted against consenting, and 2.67 million abstained, out of 89.45 million outstanding shares.