PREIT rejects resignations from 7 board members, staving off more trouble
PREIT owns the Cherry Hill Mall in New Jersey.
Seven PREIT board members who were required to tender their resignations due to a lack of shareholder votes will retain their seats after those resignations were rejected.
The decision means the struggling regional mall owner will avoid what would have been a major leadership shakeup.
Of the nine board members up for reelection at the company’s annual meeting, seven received more withheld votes than votes for, Philadelphia-based PREIT revealed in a regulatory filing last week. Under PREIT’s corporate governance, the seven board members were required to tender their resignations for consideration by the board.
PREIT said in a new filing Monday that none of the resignations were accepted, with each board member recusing themself when theirs was considered and the remaining eight board members voting to reject. The company said the rejections were made because of a combination of factors, including board members' skill sets, institutional knowledge and the recommendations of proxy advisory firms.
The seven board members were PREIT Chairman and CEO Joseph Coradino, Temple University Interim President JoAnne Epps, George Alburger, Michael DeMarco, Mark Pasquerilla, Charles Pizzi and John Roberts. Each has served varying lengths of time on the board.
The other two board members are Hart Capital Management Principal Kenneth Hart and Atlanta-based Cygnus Capital CEO Christopher Swann. Both joined the board in 2022 after buying up shares in PREIT and both received enough votes to keep their positions.
While the board is staying intact, University of Delaware’s Weinberg Center for Corporate Governance Founding Director Charles Elson told the Business Journal last week that the situation sends a strong signal to PREIT’s leadership that shareholders are seeking change.
"It’s a warning sign," Elson said. "The patient just had a heart attack. Do they keep eating and smoking or do they dramatically change their diet?"
The annual meeting took place on June 1 and PREIT had 90 days to consider the resignation offers. It only took a week for the board to reject the resignations.
PREIT, which owns retail properties including the Cherry Hill Mall and Plymouth Meeting Mall, filed for Chapter 11 bankruptcy protection in November 2020 and emerged a month later. In December 2022, the company was delisted from the New York Stock Exchange. Now being sold over the counter, PREIT’s stock price closed at 68 cents per share on Monday.
As of the end of March, PREIT’s credit facilities had a balance of $995.8 million set to mature on Dec. 10. Executives have repeatedly said they’re exploring a sale or a merger as that debt maturity closes in.
PREIT (OTCMKTS: PRET) has focused on selling assets, like the Plymouth Meeting Whole Foods site, to gain cash and streamline its portfolio. The company is exploring the sale of the Plymouth Meeting and Exton Square malls. It has also tried diversifying its tenant mix beyond traditional retail and gaining approvals to build apartments on its land currently used for parking lots.