Schorsch firm accused of conflict of interest in REIT deal

Two AR Global-managed funds with the same CFO sought to merge

TRD New York /
Jun.June 08, 2016 09:02 AM

Questionable dealings persist at Nicholas Schorsch’s AR Global, two years it was rocked by an accounting scandal, according to a recently departed director. Robert Froehlich, a board member at Realty Finance, a real estate investment trust managed by AR Global, left his position last month over concerns about a buyout offer from another AR Global-managed REIT, American Finance Trust.

Realty Finance failed to commission an independent review of the offer, Froehlich told the Wall Street Journal. And, in what he called a clear conflict of interests, the two funds shared the same chief financial officer.

“There’s no way in the world that you can sit as chief financial officer of two companies, one trying to buy the other,” Froehlich told the paper. “You have to act with undivided loyalty.”

Realty Finance defended the CFO, Nick Radesca, in a May Securities and Exchange Commission filing, saying it “strongly disagreed” with Froehlich’s allegation of conflict of interest.

Schorsch’s flagship company, American Realty Capital Properties, admitted in 2014 that it overstated financial results and deliberately concealed the error. It has since changed its name to Vereit, and is now led by Glenn Rufrano, former New York head of Cushman & Wakefield. [WSJ]Ariel Stulberg


Related Articles

arrow_forward_ios
(Image by Wolfgang & Hite via Dezeen)

Hudson Yards megadevelopment inspires a new line of sex toys

Hudson Yards megadevelopment inspires a new line of sex toys
Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio
Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
Gov. Andrew Cuomo with Judge Lawrence Marks and Judge Daniele Chinea (Getty, Linkedin, iStock)

Flip-flop on eviction ban extension highlights state’s chaotic response

Flip-flop on eviction ban extension highlights state’s chaotic response
A rendering of the Climate Solutions Center with Trust for Governors Island CEO Clare Newman and Mayor de Blasio (Rendering via WXY architecture + urban design/bloomimages; Governor's Island; Getty)

Going green: Governors Island could soon house climate center

Going green: Governors Island could soon house climate center
State Sens. Brian Kavanagh and Kevin Thomas (NY Gov; Getty; iStock)

“What would we discipline them for?”: Brokers deny discrimination at heated hearing

“What would we discipline them for?”: Brokers deny discrimination at heated hearing
 The Qualtrics Tower at 1201 2nd Avenue in Seattle with Hana Financial CEO Kim Jung-tai and Skanska USA CEO Richard Kennedy (Google Maps)

$700M Seattle office tower buy would be among largest Covid-era property deals

$700M Seattle office tower buy would be among largest Covid-era property deals
Nelson Rockefeller and 812 Fifth Avenue Photos via Getty; StreetEasy; Google Maps)

Fifth Ave co-op owned by Rockefeller family hits market

Fifth Ave co-op owned by Rockefeller family hits market
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...