Nick Schorsch stepped down from his roles as executive chairman of American Realty and from the board of non-traded real estate investment trusts (REITs) managed by Cole Capital.
Additionally, David Kay stepped down as chief executive and from the board, and Lisa Beeson stepped down as president and chief operating officer.
William Stanley was appointed to be the lead independent director and chairman of the nominating and corporate governance committee. At the same time, Stanley will serve as interim CEO and chairman of the board until permanent replacements are found.
Stanley commented on the impact of the company:
The actions taken today will stabilize the company and are necessary to strengthen future leadership and strategy, improve governance, and complete a separation from Nick Schorsch and his affiliates. These actions build on ARCP’s significant real estate assets and asset management capabilities, and will further restore investor confidence in ARCP. The Board is focused on finding highly qualified and experienced leadership for the roles of Chief Executive Officer and independent Board Chairman, as well as establishing a best-in-class governance structure. We thank David and Lisa for their service. We will continue to engage with all of our stakeholders and take actions that create long-term shareholder value.
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William M. Kahane, founding partner of AR Capital, commented on the resignation of Schorsch:
In order to reduce complexity, enhance accountability, align interests and minimize conflicts of interest among related parties and affiliates, Nick has decided to step down from his positions at ARCP and certain related companies. He did this because in creating clarity and eliminating potential conflicts, he is acting in the best interests of the shareholders. I know this has not been an easy decision for Nick, but he believes it is the correct one.
The company’s audit committee continues to work with its advisors to complete its previously announced investigation into financial statements for the fiscal year ended in December 2013.
Shares of American Realty were down more than 8% at $8.23 in late morning trading Monday. The stock has a consensus analyst price target of $10.00 and a 52-week trading range of $7.38 to $14.96. The company has a market cap of over $7 billion.
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