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Blackwells’ Ashford Hospitality Trust campaign stutters 

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Ashford Hospitality Trust’s CEO Monty J Bennett and director Kamal Jafarnia have tendered their resignations following the results of the REIT’s annual stockholders meeting on Tuesday, and a month-long “Monty Must Go” campaign by shareholder and activist hedge fund firm Blackwells Capital. 

Despite doing so, Bennett, who founded Ashford and also serves as its chairman, and Jafarnia will remain on the board following the intervention of the board’s nominating and corporate governance committee. The remaining seven nominees — Amish Gupta, J Robison Hays III, David W Johnson, Frederick J Kleisner, Sheri L Pantermuehl, Davinder “Sonny” Sra and Alan L Tallis — were re-elected.

Blackwells, which collectively owns around 1,000 shares through Blackwells Onshore I, noted in a press statement that Bennett and Jafarnia “failed to receive the requisite number of votes required for re-election” despite Ashford’s “refusal to produce a stockholder list, and with just one mailing to stockholders” ahead of the meeting.

In its own press statement, Ashford acknowledged Blackwells’ campaign but said that it “had no meaningful effect on the election”, attributing the results to recommendations by proxy advisory firm Institutional Shareholder Services that were “unsupported by the facts”.

Blackwells initiated its campaign primarily against Bennett, who, in addition to his role at Ashford, is chairman at Braemar Hotels and Resorts and serves on the board of three publicly traded companies, claiming in a shareholder presentation that he was “overboarded” and “delusional”, as well as pointing to Ashford’s underperformance and governance issues.

In a proxy statement filed with the US SEC on 2 May, Blackwells’ CIO Jason Aintabi blamed “a disasterous [sic] stock price performance, abysmal corporate governance and what appears to be a self-dealing external advisory agreement that makes Montgomery Bennett rich at the expense of stockholders” for Ashford’s “failure to act as independent fiduciaries”.

Blackwells said that Ashford had previously attempted to counter its activist efforts with “an aggressive and misleading PR campaign” and manipulating its “corporate machinery” to “entrench the board”.

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