The following is a press release that Mr. Schwartzberg intends to
release today, April 24, 2001:
PRESS RELEASE
Washington, DC
April 24, 2001
PRIVATE INVESTOR CHALLENGES BOARD NOMINEES AT HORIZON GROUP PROPERTIES
** 5% HOLDER CITES MANAGEMENT'S "FAILED ATTEMPTS TO ENHANCE
SHAREHOLDER VALUE" AND BOARD MEMBERS' "POTENTIAL CONFLICTS"**
An investor seeking a seat on the Board of Directors of Horizon Group
Properties, Inc. (Nasdaq: HGPI), Robert Schwartzberg, released a statement
today explaining his decision to run against Mr. Michael Reschke and Mr. Gary
Skoien at Horizon Group's Annual Meeting on May 8, 2001.
Mr. Schwartzberg explained, "I believe that I speak for the majority of the
shareholders when I say that we are extremely frustrated in management's failed
attempts to enhance shareholder value over the past nineteen months. The Company
has only sold one small property for $2.5 million and failed to refinance any
other assets since hiring a financial advisor in September 1999. The stock's
dropped more than 30% during this time despite the fact that REIT stocks have
generated positive returns during this period, including two outlet REITs
(Chelsea Property Group and Tanger Factory Outlets)." Mr. Schwartzberg points
out that one of the worst performing equity REITs during this time frame was
Prime Retail where Mr. Reschke, one of the Board's nominees, was Chairman from
its inception until July 2000.
Mr. Schwartzberg and Mr. John C. Loring are running for election to the Board of
Directors of Horizon Group Properties against the Board's nominees, Mr. Reschke
and Mr. Skoien. Mr. Schwartzberg is a private investor and owns 5.05% of the
common stock of Horizon and Mr. Loring, together with his wife, owns .8% of the
common stock of Horizon. Mr. Loring is an attorney and is Chairman of the Board
of Astrex, Inc. and a Director of Geauga Savings Bank. The Schedule 13Ds for
each of Mr. Schwartzberg and Mr. Loring include more information on their
respective shareholdings, which is their only current interest in Horizon.
Mr. Schwartzberg and Mr. Loring are the only participants in this
solicitation.
In Mr. Schwartzberg's Letter to Shareholders filed with the SEC today, he
questioned "whether the Board's nominees are even able
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to act in the best interests of all shareholders..." because of potential
conflicts. His letter noted that one of Mr. Reschke's affiliated companies
(Prime Outdoor LLC) was able to borrow $1.5 million from Horizon while another
affiliate (Prime Group, Inc.) received $95,000 in rental income from Horizon
last year. In addition, Mr. Skoien currently serves as Chief Operating Officer
at Prime Group, Inc. while simultaneously employed as Chairman and Chief
Executive Officer at Horizon.
Mr. Schwartzberg elaborated, "I have difficulty believing that Mr. Reschke's
interests are aligned with all the shareholders when his outside affiliates can
readily tap Horizon for cash and also receive steady rental income from the
Company." He also noted that "I am losing confidence in Mr. Skoien's ability to
make independent decisions in the best interest of ALL Horizon shareholders when
he is employed by a company affiliated with Horizon's single largest shareholder
(Mr. Reschke)."
Mr. Schwartzberg summarized by saying, "This is not just Mr. Reschke's
company.....it belongs to all of us and I think the shareholders deserve truly
independent Board members who will make sure it's operated that way. I am deeply
committed to enhancing value at Horizon since, like many shareholders, this
investment represents a large percentage of my personal net worth. I believe
that the strength of my commitment is highlighted by the fact that, excluding
Mr. Reschke, I own nearly twice as much stock as the other four existing Board
members COMBINED."
SHAREHOLDERS OF HORIZON SHOULD READ MR. SCHWARTZBERG'S PROXY STATEMENT BECAUSE
IT CONTAINS IMPORTANT INFORMATION. THE PRELIMINARY PROXY STATEMENT, THE SCHEDULE
13DS FOR MR. SCHWARTZBERG AND MR. LORING, A COPY OF MR. SCHWARTZBERG'S LETTER TO
SHAREHOLDERS, THE COMPANY'S SECURITIES FILINGS AND, WHEN AVAILABLE, THE
DEFINITIVE PROXY STATEMENT CAN BE OBTAINED FOR FREE AT WWW.SEC.GOV. A DEFINITIVE
PROXY STATEMENT AND FORM OF PROXY WILL BE AVAILABLE FOR FREE FROM MR.
SCHWARTZBERG WHEN AVAILABLE, WHICH IS EXPECTED TO BE ON OR ABOUT APRIL 30, 2001.
For more information contact (202) 367-3014 |
