Business Context and Reporting Period
This Form 8-K was filed by Ashford Hospitality Prime, Inc. on April 7, 2016. The report details a material definitive agreement regarding the governance structure of Ashford Hospitality Prime Limited Partnership. The filing addresses a reversal of partnership amendments previously approved on February 1, 2016, following feedback from the investor community.
Key Financial Metrics
This filing is a current report regarding corporate governance and does not contain financial statements. Consequently, there are no reported values for revenue, profit, cash flow, margins, debt, or liquidity in this document.
Material Changes Versus Prior Period
The primary material change is the execution of Amendment No. 1 to the Second Amended and Restated Agreement of Limited Partnership. This amendment reverses the "February 1 Amendments," which had previously:
- Broadened the General Partner's rights to indemnification and expense advancement.
- Added requirements for Limited Partners to redeem units.
- Increased the threshold for Limited Partners to call a special meeting to 66 2/3%.
- Granted the General Partner additional time to obtain approvals for issuing common stock following unit redemptions.
- Revised consent rights to require shorter objection notice periods.
Additionally, the Company agreed to issue Series C Preferred Stock to qualified Limited Partners as consideration for the February 1 Amendments. Under the new Amendment No. 1, the issuance of this Series C Preferred Stock is suspended unless and until it is approved by the Company's stockholders.
Guidance, Outlook, and Management Commentary
Management stated that the decision to reverse the February 1 Amendments was made in response to feedback from the investor community. The Company has determined to refrain from issuing the Series C Preferred Stock until such issuance is approved by stockholders in a form and manner complying with all applicable laws and stock exchange rules. The filing explicitly states that the Company has no immediate plans to seek this stockholder approval.
Important Facts for Investor Verification
- The February 1, 2016 amendments to the Partnership Agreement have been reversed.
- The issuance of Series C Preferred Stock, intended as consideration for the prior amendments, is currently suspended pending stockholder approval.
- The Company has no immediate plans to seek stockholder approval for the Series C Preferred Stock.
- Investors should review Exhibit 10.1 for the complete text of Amendment No. 1.