Corvex and Related's consent solicitation vote (March 20) for CommonWealth REIT (CWH -0.6%) is at best (assuming a victory for the dissident shareholders) only a beginning in the battle to wrest control of the company from the Portnoys, writes law professor Steven Davidoff.
"Lawyers are clever," reminds Davidoff, and even if the Portnoys can't wiggle out of a vote going against them, they still have a management contract with CommonWealth. Could this be terminated? What would be the cost? RMR's management fees in 2012 were $77.3M.
A reminder: Corvex and Related need a whopping 2/3 of the votes to unseat the Portnoys and the rest of the Commonwealth board, though last year's attempt (invalidated by an arbitration panel) received more than 70% approval.
Seemingly, at least beginning to price in a victory for shareholders, CWH is up 15.3% YTD.
In other news, beginning today and running through March 24, shareholders owning at least $2K of company stock for at least one year may make board nominations. The existing board continues to diligently search for qualified independent directors.