Forms Board Committee of Independent Directors to Explore Strategic
Alternatives and Retains Independent Financial Advisor to Support Process
Agrees to Appoint Leland Abrams and Lazar Nikolic, Who Possess Strong
Single-Family Market Experience and REIT Expertise, as Independent
Directors Immediately Following 2019 Annual Meeting
CHRISTIANSTED, U.S. Virgin Islands–(BUSINESS WIRE)–Front Yard Residential Corporation (“Front Yard” or the “Company”)
(NYSE: RESI) today announced several new strategic initiatives that it
believes will position Front Yard for ongoing success and support its
efforts to maximize value for all stockholders. In conjunction with
these new initiatives, Front Yard announced it has reached an agreement
with Snow Park Capital Partners and certain of its affiliates
(collectively “Snow Park”) with respect to its director nominees and
certain other matters.
Board Refreshment
Front Yard has agreed to appoint two new independent directors, Leland
Abrams and Lazar Nikolic, to the Company’s Board of Directors (the
“Board”) immediately following the Company’s Annual Meeting of
Stockholders on May 23, 2019 (the “Annual Meeting”). Concurrently, David
B. Reiner will be retiring from the Board. With these changes, Front
Yard’s Board will increase from seven to eight directors, seven of whom
are independent. Snow Park has agreed to vote for Front Yard’s entire
slate of director nominees at the Company’s upcoming annual meeting and
to withdraw its proxy contest.
Formation of Board Committee to Explore Strategic Alternatives
Front Yard has been executing on a strategy to unlock what we believe is
imbedded value in our assets and platform. Despite these efforts, Front
Yard does not believe its current share price accurately reflects the
value of the company. To maximize value for shareholders, Front Yard
also announced that the Board will form a committee, comprised of
independent directors, including one of Mr. Abrams or Mr. Nikolic (the
“Committee”), to explore strategic alternatives. The Committee intends
to review strategic alternatives available to Front Yard, including,
without limitation, the potential internalization of the asset
management function, the potential termination of the asset management
agreement with Altisource Asset Management Corporation and the potential
sale of the Company. Deutsche Bank Securities Inc. has been retained as
an independent financial advisor to assist in the exploration of a full
range of strategic alternatives. Front Yard intends to update its
stockholders on further developments after the Committee concludes its
review of strategic alternatives, or it has otherwise determined that
disclosure is appropriate.
Agreement with Snow Park
As described in more detail in Front Yard’s Current Report on Form 8-K
to be filed today with the Securities and Exchange Commission, Front
Yard entered into an agreement with Snow Park that provides for the
appointment of Messrs. Abrams and Nikolic to the Front Yard Board, Snow
Park’s withdrawal from the proxy contest and Snow Park’s agreement to
customary standstill provisions, among other items.
George Ellison, Front Yard’s Chief Executive Officer, stated: “These
initiatives are the result of constructive dialogue between the Company
and its stockholders. We welcome Leland and Lazar to the Board and look
forward to working with them to achieve our goals. Our new directors
bring additional experience, independence and fresh perspectives, which
we expect will help Front Yard deliver superior stockholder returns.”
Rochelle Dobbs, Chair of Front Yard’s Board said, “The Front Yard Board
is focused on continuing to execute on our strategy, reviewing all
strategic alternatives and driving stockholder value. We are pleased to
add Leland and Lazar to our other experienced and highly qualified
nominees. We will work together to drive sustainable growth and enhance
value for all Front Yard stockholders. Additionally, we thank David for
his outstanding service and significant contributions to the Company and
wish him well in his future endeavors.”
Jeffrey Pierce, Managing Partner of Snow Park, added: “Our recent
discussions with the Board have been positive and productive. Snow Park
is pleased that Leland and Lazar will be able to add their strong
single-family market experience and valuable REIT insights to the Front
Yard Board. As the Board carries out its assessment of strategic
alternatives, we believe the addition of new directors and fresh
perspectives will enhance efforts to maximize stockholder value.”
Director Biographies
Leland Abrams
Leland Abrams, age 36, has served as a Fund Manager at Wynkoop, LLC
(“Wynkoop”), an investment fund manager, since September 2016. Mr.
Abrams has played an active role in supporting his firm’s efforts in the
single-family residential market, including with respect to portfolio
management and transactions. Prior to joining Wynkoop, Mr. Abrams was a
RMBS Sector Manager for Candlewood Investment Group, LP, an alternative
asset management firm focused primarily on credit opportunities where he
was responsible for overseeing approximately half of its structured
credit investments, from November 2010 until April 2016. From 2008 until
2010, Mr. Abrams was a structured mortgage and esoteric ABS trader and
credit analyst at United Capital Markets, Inc., a secondary market maker
concentrating on asset backed and mortgage backed securities. Mr.
Abrams’ RMBS experience afforded him the opportunity to develop unique
insight into the fundamentals and operating realities of the
single-family market. Prior to that, Mr. Abrams was a credit analyst and
trader on the proprietary credit trading desk at Dresdner Bank, A.G., a
mid-size investment banking firm offering brokerage services and
investment products, from 2005 until 2008. Mr. Abrams holds a B.A. in
Economics from Bucknell University.
Lazar Nikolic
Lazar Nikolic, age 39, is the founder and has served as managing member
of both JPL Advisors LLC and JPL Management Services LLC, which are
providers of investment management services to private funds, since
January 2016. He also previously founded and ran MVC Real Estate, a
single-family residential market investment vehicle that acquired and
managed rentals in one the country’s largest home markets, from 2013 to
2019. Mr. Nikolic’s current responsibilities at JPL include portfolio
management, investment analysis and risk management, and he currently
focuses on RMBS, structured credit, m-REITs, e-REITs, closed-end funds,
specialty finance companies and special situations. From September 2009
until December 2015, Mr. Nikolic was a portfolio manager at Adler & Co.,
a family office. Prior to that, Mr. Nikolic was a hedge fund analyst at
Alpha Beta Capital Management LLC, an investment advisor, from 2007
until 2009. Previously, Mr. Nikolic served as a software engineer at
Bloomberg L.P., a privately held financial, software, data and media
company, from 2003 until 2007. Mr. Nikolic holds an M.S. in Math-Finance
from New York University’s Courant Institute as well as a B.S. in both
Mathematics and Computer Science from Lafayette College.
About Front Yard
Front Yard is an industry leader in providing quality, affordable rental
homes to America’s families. Our homes offer exceptional value in a
variety of suburban communities that have easy accessibility to
metropolitan areas. Front Yard’s tenants enjoy the space and comfort
that is unique to single-family housing, at reasonable prices. Our
mission is to provide our tenants with houses they are proud to call
home. Additional information is available at www.frontyardresidential.com.
About Snow Park
Snow Park Capital Partners, LP is a privately-held investment manager
that specializes in investing in publicly-traded real estate securities
across the capital structure. Based in New York City and founded by
Jeffrey Pierce, the firm focuses on producing strong risk-adjusted
returns for a diverse investor base of public institutions, private
entities and qualified individual clients.
Forward-Looking Statements
The information in this press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended, regarding management’s beliefs, estimates,
projections, anticipations and assumptions with respect to, among other
things, the Company’s financial results, future operations, business
plans and investment strategies, industry and market conditions and the
future composition of the Company’s Board. These statements may be
identified by words such as “anticipate,” “intend,” “expect,” “may,”
“could,” “should,” “would,” “plan,” “estimate,” “target,” “seek,”
“believe” and other expressions or words of similar meaning. We caution
that forward-looking statements are qualified by the existence of
certain risks and uncertainties that could cause actual results and
events to differ materially from what is contemplated by the
forward-looking statements. Factors that could cause our actual results
to differ materially from these forward-looking statements may include,
without limitation, our ability to implement our business strategy; our
ability to make distributions to stockholders; our ability to acquire
SFR assets for our portfolio, including difficulties in identifying
assets to acquire; the impact of changes to the supply of, value of and
the returns on SFR assets; our ability to successfully integrate newly
acquired properties into our portfolio of SFR properties; our ability to
successfully operate our internal property manager and perform property
management services for our SFR assets at the standard and/or the cost
that we anticipate; our ability to transition property management for
the SFR properties currently managed by third party property managers to
our internal property management platform; our ability to predict our
costs; our ability to effectively compete with our competitors; our
ability to apply the proceeds from financing activities or non-rental
real estate owned asset sales to target SFR assets in a timely manner;
our ability to sell non-rental real estate owned properties on favorable
terms and on a timely basis or at all; the failure to identify
unforeseen expenses or material liabilities associated with asset
acquisitions through the due diligence process prior to such
acquisitions; changes in the market value of our SFR properties and real
estate owned; changes in interest rates; our ability to obtain and
access financing arrangements on favorable terms or at all; our ability
to maintain adequate liquidity; our ability to retain our engagement of
Altisource Asset Management Corporation; the failure of our third party
vendors to effectively perform their obligations under their respective
agreements with us; our failure to maintain our qualification as a REIT;
our failure to maintain our exemption from registration under the
Investment Company Act; the impact of adverse real estate, mortgage or
housing markets; the impact of adverse legislative, regulatory or tax
changes; and other risks and uncertainties detailed in the “Risk
Factors” and other sections described from time to time in our current
and future filings with the Securities and Exchange Commission. In
addition, financial risks such as liquidity, interest rate and credit
risks could influence future results. The foregoing list of factors
should not be construed as exhaustive.
The statements made in this press release are current as of the date of
this press release only. The Company undertakes no obligation to
publicly update or revise any forward-looking statements or any other
information contained herein, whether as a result of new information,
future events or otherwise, except as required by law.
Contacts
Investors:
Robin N. Lowe
Chief Financial Officer
(345)
815-9919
[email protected]
Media
(for Front Yard):
Jonathan Gasthalter/Nathaniel Garnick
Gasthalter
& Co.
(212) 257-4170
[email protected]
Media
(for Snow Park):
Profile
Greg Marose/Charlotte Kiaie
(347)
343-2999
[email protected]
