Benzinga | Jan 25, 2021 08:08AM EST

Ashford Hospitality Trust Shareholder, Cygnus Capital, Comments On Suit Filed By Co. On Jan. 19, 2021: Says Intends To Fight Co.'s 'Baseless Lawsuit'

Cygnus Capital, Inc. (together with its affiliates, "Cygnus" or "we"), which collectively with the other participants in its solicitation beneficially owns approximately 2.7% of the outstanding shares of common stock of Ashford Hospitality Trust, Inc. (NYSE:AHT) ("AHT" or the "Company"), including 40,000 shares of common stock underlying certain call options, and a significant portion of each of the outstanding series of preferred stock, today commented on the lawsuit filed by AHT on January 19, 2021. AHT is suing Cygnus in order to prevent the firm from nominating director candidates and running an election contest at the Company's 2021 Annual Meeting of Stockholders ("Annual Meeting").

As a reminder, on January 5, 2021 Cygnus announced that it has nominated five highly-qualified and independent candidates for election to AHT's eight-member Board of Directors (the "Board") at the Annual Meeting. Please visit www.RenovateAshford.com to learn more about the Cygnus slate and sign up for updates.

Christopher Swann, Founder and Chief Executive Officer of Cygnus, stated:

"The lawsuit filed last week by AHT is baseless and we intend on vigorously defending ourselves. This action appears to be a blatant entrenchment maneuver intended to disenfranchise Cygnus and insulate Monty Bennett and his boardroom allies, who have demonstrated a flagrant disregard for stockholders and their rights for years. We contend that the incumbent Board has irreparably impugned its credibility by once again weaponizing litigation in an attempt to silence a sizable stockholder and undermine corporate democracy.

We believe stockholders should be equally alarmed that the Board is wasting AHT's finite resources on under-handed efforts to harm Cygnus and thwart a fair, open election contest. AHT recently took the extraordinary step of having its external legal counsel -- paid for by stockholders -- directly contact and seemingly harass hundreds of our limited partners, who had nothing to do with Cygnus' decision to nominate director candidates. This followed AHT's representatives apparently trying to intimidate our nominees, including one who ultimately resigned from our slate in early January rather than serve as its sixth member. Fortunately for stockholders, Cygnus will not allow Mr. Bennett to use scorched-earth litigation and reputational attacks as means of escaping accountability.

In our view, the need for meaningful change atop AHT has only been reinforced by the Board's increasingly anti-stockholder agenda. AHT recently announced it intends to grant approximately 1% of its stock to its Chief Executive Officer, Rob Hays, who is one of Mr. Bennett's long-time associates. The Company also amended its external advisory agreement to make it more difficult to terminate the Ashford Inc. arrangement that handsomely rewards the Bennett family. These moves come on the heels of seemingly perpetual dilution.

It is important to stress that Cygnus brings a long-term mindset to its public market investments. Although we have never before nominated director candidates, the dire situation at AHT has compelled us to fight for change and protect stockholders from further dilution and suffering. Cygnus will not be deterred by the incumbent Board's low-road campaign and remains fully committed to offering stockholders the opportunity to vote for sorely-needed change at this year's Annual Meeting. We continue to believe there is tremendous value that can ultimately be unlocked at AHT with a reconstituted and independent Board at the helm."