Capstone Equities Capital Management today commented on Altisource Residential
Corporation's (RESI) announcement that it is rescheduling its earning
conference call for the full year 2014, as it is "in the final stages of
modifying its asset management agreement with Altisource Asset Management
Corporation." By its letter dated February 27, 2015 (Full Demand Letter at
www.capstonecm.com), Capstone demanded that the RESI Board of Directors
terminate the AMA under section 11 for cause without paying a termination fee.
Consistent with that demand, Capstone believes that any restructuring of the
AMA should not involve a payment to AAMC of a termination fee. Capstone
further believes that any restructured management fee should be at the median
market rate equal to 1.5% of NAV, as detailed in the shareholder derivative
lawsuit filed on behalf of RESI on January 15, 2015. Capstone believes the
board of RESI has a fiduciary duty to negotiate the terms of the asset
management agreement on an arm's length basis, which may require bringing in
qualified experts as third parties to represent RESI and AAMC independently in
these negotiations.
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