Cascadilla Capital Partners urges sale or liquidation of Power REIT
Todd Merkle, Managing Principal of Cascadilla Capital Partners and owner of 21,000 shares of Power REIT, (PW) released a letter to Power REIT's Board of Trustees urging the company to pursue a sale or liquidation of its assets. The letter, which can be found here, also addressed the following in part: "Since David Lesser became Chairman of the Board of Power REIT on November 30, 2010: The company's stock price has declined by approximately 45% and its dividend has been eliminated, while the total return on the S&P 500 has been over 162%; In 2015, in the wake of Power REIT's loss in the Norfolk Southern (NSC) litigation, Mr. Lesser and Power REIT Board member Patrick Haynes launched Intellistay Hospitality. Intellistay Hospitality has acquired four hotels since that time while Power REIT has been totally inactive. Yet Power REIT has compensated Mr. Lesser with approximately $1.5M worth of Restricted Stock during this period of inactivity; Notwithstanding Mr. Lesser and Mr. Haynes' relationship as business partners in Intellistay Hospitality, Mr. Haynes has remained one of two members of Power REIT's Compensation Committee, raising serious questions about Mr. Haynes' independence and material conflicts of interest. Power REIT is unlikely to ever trade at, or near, net asset value due to management's track record of value destruction.A sale or liquidation of Power REIT's four high quality assets and approximately $2M cash balance would likely generate proceeds to shareholders of $11.00-$12.00 per share, nearly double recent trading prices, and enable shareholders to recover a significant portion of the losses that have been incurred under Mr. Lesser's watch. For these reasons, the letter strongly encourages Power REIT's Board to immediately commence a process to sell or liquidate the company in order to maximize value for shareholders."