In a 13D filing on Syms Corp (SYMS), Esopus Creek Value LP and related funds disclosed a 3.76% stake in the company, or approximately 8.76% of the non-controlled shares of the Company. The firm also disclosed a letter to the Board of Directors, calling on them to take steps to maximize shareholder value, including a full appraisal of the value of the Company's real estate.
The firm also requested the Independent Directors conduct an exhaustive review of the performance of each of the retail stores and then to close such locations that do not generate cash flow in excess of the cash flow value that could be generated if such locations were either developed or leased to an unrelated third party.
From the Letter:
In December 2007 you decided to de-register and de-list the Company's shares on the recommendation of SYMS's controlling stockholder despite the strong protestations of Esopus and other large minority holders. Today any reasonably informed minority shareholder would find that your actions directly caused a destruction in the market price of SYMS common shares and its accompanying liquidity. ... And parenthetically, should you entertain the concept of initiating a reverse stock split scheme, or any functional equivalent, in order to facilitate a future de-registration of SYMS shares, we will consider such action an improper discharge of your fiduciary duties to your minority stockholders.
Steps would include your conducting a full appraisal of the value of the Company's owned real estate, performed by a reputable and nationally recognized real estate appraisal firm, and then to make public such appraisals. Furthermore we call upon you to conduct an exhaustive review of the performance of each of your retail stores and then to close such locations that do not generate cash flow in excess of the cash flow value that could be generated if such locations were either developed or leased to an unrelated third party.
A suitable candidate for such development might include your 42 Trinity Place (“42 Trinity”) location in lower Manhattan, a footprint which enjoys over 170,000 square feet of buildable space based upon our research. And just to illustrate the enormous value that has yet to be unlocked by the Company, on April 17, 2008, just four days ago, New York City property records revealed that a nearby parcel located at 8 Stone St., having approximately 100,000 buildable square feet and the same zoning characteristics as 42 Trinity, sold for over $60 million to a hotel developer. This transaction equates to $600 per buildable square foot thus implying a valuation for 42 Trinity at $102 million.