United Development Funding IV fka UDFI

[56Chevy]

Since the tender amount was changed from $1.50 to $1 its fair to postulate their overall cost was in the neighborhood of $48,327.50.

When you're looking for 1.55MM and only pick up 38,662 it was hardly worth the professional fees to send out those fishing letters. I'm reminded hindsight is always 20/20. It was a shrewd move none the less.

The deadline for that tender offer was over 12/6...which means we may see open market purchases?? or perhaps another round of offers???

EI reminded me 9.8% ownership is the max on a REIT which makes sense now why the limit to purchase was set at 1.55MM.

II. The 5/50 Ownership Limitation

The “5/50 test” essentially provides that five or fewer individuals may not own, actually and/or constructively, more than 50% of the value of the REIT’s stock during the second half of a taxable year.4 A typical ownership limitation provision will thus generally prohibit anyone from owning, actually and/or constructively, in excess of 9.8% of the value of the REIT’s outstanding stock — making it impossible for any five holders together to own more than 50%.5 This is often described as a “5/50 ownership limit.” If there is already a single individual (e.g., a founder) owning, actually and/or constructively, more than 9.8% of the outstanding stock, then the 5/50 ownership limit may be set even lower than 9.8% to ensure that any additional four “individuals,” together with the founder, will not exceed 50% in the aggregate.6

*This article goes on to give a few exceptions and examples to the 9.8% rule.

source:
http://www.jdsupra.com/legalnews/waivers-of-ownership-limitation-68656/