UDF IV Board Silent on Critical Shareholder Concerns Raised by NexPoint

In This Article:

Board Continues Deflection Tactics to Avoid Accountability

Current Trustees Refuse to Answer Serious Questions, Highlighting Need for New Leadership

DALLAS, Nov. 7, 2024 /PRNewswire/ -- NexPoint Real Estate Opportunities, LLC (together with its affiliates "NexPoint") provided an update on United Development Funding IV ("UDF IV" or the "Company") and the current Board of Trustees election.

Shareholder Letter
Shareholder Letter

In a recent letter, NexPoint alerted fellow shareholders of the Company's persistent use of deflection tactics to evade accountability and shift focus away from its own failings. UDF IV has employed these tactics before. The Board and management blamed external parties for criminal misconduct, disclosure violations, and governance failures that occurred for years at UDF IV under the current Trustees. Those accusations against external parties have since been disproven, revealing a pattern of deception used by the Board and UDF management to obscure their own culpability.

  • A copy of the shareholder letter can be found here.

In the face of this proxy fight, rather than presenting shareholders with a clear agenda for the Company moving forward, the Board has employed a classic fearmongering campaign: imploring shareholders to fear and improbable threats, while ignoring the Company's well-documented pattern of corporate misbehavior that spans almost a decade and is likely to continue without meaningful change.

The letter urges shareholders to ignore these deception tactics and focus on key questions NexPoint has raised that the current Trustees have failed to answer, including:

  • Why did the Board take no meaningful action after the criminal convictions of former UDF executives?

  • Why is the Board continuing to enrich those same executives—now serving prison sentences for defrauding UDF IV shareholders—through the Company's lucrative advisory agreement?

  • Why haven't the current Trustees provided plans to maximize value and liquidity at any point over the last several years while on the Board—not to mention as part of their bid for reelection today?

These and other unanswered critical questions make clear that the current Trustees and UDF management have no plan beyond clinging to the status quo.

The current Trustees have gone years without showing any accountability; shareholders have no reason to believe they will make any significant changes now. Recent financials reveal troubling trends that provide a bleak outlook for UDF IV unless changes occur. This election is the only opportunity for years to come to effectuate wholesale change by voting for NexPoint's nominees, who will represent shareholders' interests and enact critical change to recover value and liquidity on behalf of all shareholders.

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