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SEC Filings

FOREST CITY REALTY TRUST, INC. filed this Form 10-Q on 10/30/2018
Entire Document
Forest City Realty Trust, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) of Forest City Realty Trust, Inc. and subsidiaries should be read in conjunction with the financial statements and footnotes thereto contained in the annual report on Form 10-K for the year ended December 31, 2017.
Corporate Description
We principally engage in the operation, development, management and acquisition of office, apartment and retail real estate and land throughout the United States. We have approximately $8.6 billion of consolidated assets in 16 states and the District of Columbia at September 30, 2018. Our core markets include Boston, Chicago, Dallas, Denver, Los Angeles, Philadelphia, and the greater metropolitan areas of New York City, San Francisco and Washington, D.C. We have regional offices in Boston, Dallas, Denver, Los Angeles, New York City, San Francisco, Washington, D.C., and our corporate headquarters in Cleveland, Ohio.
Review of Strategic Alternatives and Reconstituted Board
On March 22, 2018, we announced that our Board of Directors (the “Board”) concluded its previously announced review of strategic alternatives. After extensive evaluation and deliberation, including review and analysis of multiple offers, the Board determined that stockholder value would be better enhanced on a standalone basis than by pursuing a transaction on the terms and pricing indicated by the offers received.
In addition, on March 22, 2018, we announced our entry into agreements with Starboard Value LP ("Starboard") and Scopia Capital Management LP ("Scopia"), which, as of March 22, 2018, owned approximately 3.0% and 8.3% of our outstanding shares, respectively, and RMS, Limited Partnership ("RMS"), which, prior to the elimination of our dual-class stock structure in 2017, was our controlling stockholder, pursuant to which:
Nine directors agreed to resign from the Board;
Michelle Felman, Adam S. Metz, Marran H. Ogilvie, Mark S. Ordan, William R. Roberts, and Robert A. Schriesheim were appointed on April 16, 2018, as new independent directors to the Company's Board;
James A. Ratner became Interim Chairman of the Board. The reconstituted Nominating and Governance Committee initiated a process to identify and recommend a new Chairman or Executive Chairman of the Board. Candidates will include both new Board members as well as external candidates that are seasoned real estate industry executives or professionals;
The reconstituted Nominating and Governance Committee initiated a process to identify an additional independent director to join the Board;
Each of Starboard and Scopia had the right to appoint one additional director to the Board. Gavin T. Molinelli is the Starboard appointee and Jerome J. Lande is the Scopia appointee;
RMS agreed to alter its director nomination rights from four members of the Ratner family to two designees, one director who must be independent under NYSE listing standards and one director who may be either a family member or independent under NYSE listing standards. William R. Roberts serves as the independent RMS designee. RMS also gave up its right for James Ratner to be elected Chairman of the Board, and he will resign from the Chairmanship upon appointment of the new Chairman identified by the process referred to above; and
David J. LaRue, Kenneth J. Bacon, Z. Jamie Behar and James A. Ratner continued their service on the Board.
Merger Agreement
On July 30, 2018, after careful consideration the Board voted seven to five to enter into an Agreement and Plan of Merger (the “Merger Agreement”) with Antlia Holdings LLC (“Parent”) and Antlia Merger Sub Inc. (“Merger Sub”), pursuant to which, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. Consummation of the Merger is subject to the satisfaction or waiver of specified closing conditions, including the approval of the Merger by the affirmative vote of the holders of a majority of the Company’s outstanding shares Class A common stock entitled to vote on such matter at a meeting of the Company’s stockholders scheduled to be held November 15, 2018 (“the Special Meeting”) and other customary closing conditions for a transaction of this type.