Another sour merger…
Sometimes, a disclosure in a recent filing prompts you to dig a bit deeper and look back. That’s exactly what happened when I caught the following disclosure in Brandywine’s (BDN) proxy filed yesterday:
Represents (i) $516,685 for the cost for use of a private aircraft that we provide to Mr. Prentiss as a continuing benefit under his employment agreement with Prentiss Properties Trust that we assumed in our acquisition of Prentiss Properties Trust; (ii) $75,967 on account of office space (including rents and tenant improvements) that we provide to Mr. Prentiss under his consulting agreement with us; (iii) $70,741 on account of secretarial services that we provide to Mr. Prentiss under his consulting agreement with us;
That seemed like a lot of money, especially since it wasn’t clear exactly what Michael Prentiss’ role was at the company, other than serving as a trustee. Not to mention the fact that the company’s primary business is office space, so presumably they could have found something a bit more cheaply for Prentiss to do whatever it is he was doing.
Digging back a bit, I came across this 8-K (be sure to read the exhibits) from Feb. 11, which clearly showed that a little over a year after the grand announcement of the $3.3 billion deal to acquire Prentiss Properties Trust, things weren’t going so smoothly in the board room, a story that doesn’t seem to have been picked up anywhere, based on my searching around.
As the 8-K notes, former Prentiss CEO Thomas August, who became a Brandywine trustee after the merger, was offered the chief operating officer job at Brandywine, but the two couldn’t come to terms. That prompted the resignation of both August and Prentiss as trustees in February. The letter that August wrote — and later back-pedaled on clearly shows a high-level of frustration at a time when Brandywine’s stock has been declining.
Chalk it up to just another sour merger. On the plus side, Brandywine looks like it will be saving some money by not having to cover Prentiss’ hefty travel, office and secretarial bills.