WSR - Delaware Court of Chancery Rules in Favor of Whitestone | Benzinga
HOUSTON, Jan. 25, 2024 (GLOBE NEWSWIRE) -- In Whitestone REIT Operating Partnership, L.P. ("Whitestone") v Pillarstone Capital REIT ("Pillarstone"), the Delaware Court of Chancery issued a ruling today in Whitestone's favor with the following findings:
- Whitestone proved that Pillarstone's adoption of the Rights Agreement ("Poison Pill") breached the implied covenant of good faith and fair dealing and caused Whitestone harm.
- That Whitestone may proceed to serve a notice of redemption for some or all of its units without fear of damaging repercussions.
- That once redemption has occurred and Pillarstone has assigned a current value to the partnership's assets, the Court of Chancery will enter a monetary judgement against Pillarstone for the difference between the amount Whitestone would have received in or around December 2021 ($51,200,600 + interest) and the current value.
With the Poison Pill constructed by Pillarstone's trustees Dennis Chookaszian, Kathy Jassem, Paul Lambert, and former Whitestone executives James Mastandrea and John Dee declared unenforceable today, Whitestone served Pillarstone with a notice of redemption for all of its units. The limited partnership agreement provides Whitestone with an express right to exit its investment by tendering a notice of redemption and Capital Pillarstone REIT Operating Partnership L.P. has 30 days to determine a current value.
Whitestone REIT's management anticipates they will be able to provide further updates on the path to monetizing Whitestone's investment in Pillarstone REIT Operating Partnership L.P. on their 4th quarter earnings call on March 7, 2024. The ultimate value Whitestone receives from monetization may be different than the court's monetary judgement, depending on the value of the assets.
The full ruling can found here.
This ruling is preceded by ...