Bankruptcy: Whitestone REIT

Form Type: 10-K

Filing Date: 2025-03-17

Corporate Action: Bankruptcy

Type: Update

Accession Number: 000143774925007990

Filing Summary: On January 25, 2024, a significant legal ruling was made in favor of Whitestone OP, whereby the Delaware Court of Chancery determined that Pillarstone breached the implied covenant of good faith and fair dealing when it adopted a shareholder rights agreement that impaired Whitestone OP's redemption rights. The court deemed the Rights Plan unenforceable concerning the limited partners and permitted Whitestone OP to exercise its redemption rights. Following this, on January 25, 2024, Whitestone executed a notice of redemption for nearly all of its investment in Pillarstone OP. On March 4, 2024, Pillarstone REIT initiated Chapter 11 bankruptcy, impacting both Pillarstone OP and its affiliated entities. To date, Whitestone has not received the anticipated compensation related to its equity redemption, prompting the intent to pursue legal avenues for collection of the owed amounts, anticipated to exceed the current carrying value of Whitestone's investment in Pillarstone OP.

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