NEWPORT
BEACH, Calif., May 10, 2023
/PRNewswire/ -- The following press release is distributed on
behalf of Frank Kavanaugh, who owns
9.70% of Medalist Diversified REIT's (NASDAQ: MDRR), outstanding
shares and supports the company's management and board -- In
response to a press release from Jon S.
Wheeler, 9.70% shareholder Frank
Kavanaugh acknowledges the concerns raised by Wheeler and
other shareholders in Medalist Diversified REIT, Inc. (NASDAQ:
MDRR). These concerns stem from the company's net losses totaling
over $9,000,000 in 2021 and 2022, the
impairment of the Hampton Inn Property resulting in a loss of
$3,494,058, the $6,885,029 compensation paid to its management
team since its inception, and an additional $3,500,000 in termination & transaction fees
voted in by Independent Directors who are pushing the company to
sale instead of looking to enhance the position of the
shareholders.
He appreciates the efforts of the "Special Committee" and
believes reconsideration of the current sale plan and timing is
crucial for enhancing shareholder value. MDRR has solid assets,
reasonable debt and duration, and believes William Elliott's focus on product types and
markets is worthwhile. Continuing the process of selling assets or
the company at these levels will further erode shareholder
equity.
Change is overdue. Tim Messier's
mismanagement destroyed 90% of shareholder value. Kavanaugh urges
the board to replace him with interim CEO William Elliott, stabilize operations, and
devise a solid plan. The company suffered over $9M losses in two years, a $3.9M capital loss from a flawed hotel strategy,
dividends paid from equity eroding capital, and a value-diminishing
external management agreement.
Kavanaugh proposes the independent board members take the
following actions:
- Appoint 2 additional independent board members to avoid the
appearance of impropriety.
- Suspend the "Special Committee" sale process until the board,
and management is reconstituted.
- Consider termination of Mr. Messier from leadership.
- Develop a focused plan for improving financial performance
& reversing losses by considering:
- Suspending dividends for 12 months while restructuring the
operations.
- Begin consistent and appropriate common & preferred share
repurchases.
- Review external management agreement and consider restructuring
to reflect circumstances.
- Discuss conversion of unpaid management fees to equity
- Prioritize shareholder transparency, providing updates on
progress, financial performance, and strategic initiatives.
By adopting these strategies, Medalist Diversified REIT, Inc.
can rebuild shareholder trust and show dedication to stakeholder
value. As a major shareholder, Kavanaugh pledges to hold leadership
accountable and support management and the board in enhancing the
company's performance.
For more information or to voice your support, please contact
Frank Kavanaugh.
For media inquiries, please contact:
Frank Kavanaugh
Fort Ashford Funds, LLC
fkav@fortashford.com
949 212-2222
About Medalist Diversified REIT, Inc.: MDRR is a Maryland corporation formed in 2015 that went
public in 2018, with a focus on acquiring, repositioning,
renovating, leasing, and managing income-producing properties
across the southeastern United
States. The company's primary investments include Grocery
Anchored Centers and Industrial Properties.
About Fort Ashford Funds, LLC: founded in 2001 by Susan &
Frank Kavanaugh, originated as a
family office and now operates as a private investment firm.
Focusing on direct investments across asset classes like business
growth equity, real estate, and social impact, the firm seeks to
engage and elevate communities. Investing in non-control equity
positions in private and public companies, primarily within
Community Banking, Real Estate, and Education sectors, Fort Ashford
strives to generate stakeholder value and foster local community
growth.
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SOURCE Frank Kavanaugh
