NexPoint Provides Update on UDF IV's Proposed Merger with Ready Capital, Plans to Submit Competing Proposal

Core Viewpoint - NexPoint is deferring its vote on the proposed merger of UDF IV with Ready Capital and is encouraging shareholders to take no action until the Board properly reviews any competing proposal [1][2][6] Group 1: Concerns Regarding the Ready Merger - NexPoint has significant concerns about the Ready Merger, particularly regarding the Board's history of failing to protect shareholder interests [2][3] - The Glass Lewis report supports NexPoint's concerns, questioning the Board's ability to negotiate effectively and the timing of the transaction [3][7] Group 2: Proposal for Postponement - NexPoint urges the UDF IV Board to postpone the Special Meeting from March 4 to April 4, 2025, to allow for proper review of a competing proposal [4][5] - This postponement would ensure that if the Ready Merger is ultimately deemed superior, it could still be completed by the April 15, 2025 deadline [5] Group 3: Voting Recommendations - NexPoint has not voted on the Ready Merger and encourages shareholders to withhold their votes or withdraw any previously submitted votes to compel the Board to engage adequately [6][10] - The Board's previous engagements with NexPoint have been ignored or met with hostility, raising concerns about the Board's commitment to shareholder interests [6] Group 4: Issues with Shareholder Economics - UDF IV shareholders would receive a significant portion of their consideration in Ready Capital stock, which has been negatively impacted by declining cash flow and distribution cuts [9] - The merger may create additional selling pressure on Ready Capital's stock, further eroding its price and the value received by UDF IV shareholders [9] Group 5: Benefits to Board and Insiders - The Ready Merger provides disproportionate benefits to the UDF IV Board and insiders, allowing them to avoid accountability for past mismanagement [10] - Extensive indemnification provisions in the merger agreement limit shareholders' ability to seek recovery for misused funds, potentially amounting to tens of millions of dollars [10][11]