Forest City Concludes Initial Evaluation of Dual-Class Structure

CLEVELAND, Oct. 26, 2016 /PRNewswire/ -- Forest City Realty Trust, Inc., (NYSE: FCEA and FCEB) today announced that on August 18, 2016, the Board of Directors established an Independent Committee of Class A directors, chaired by Lead Independent Director Dr. Scott Cowen, to evaluate the merits of collapsing the Company's dual-class share structure.

The Independent Committee, with the assistance of its independent financial advisor Lazard and legal advisor Sullivan & Cromwell LLP, conducted a comprehensive evaluation of the Company's dual-class structure. As part of this evaluation, the Independent Committee approached RMS, Limited Partnership (RMS), the controlling shareholder of the Company's Class B shares, to explore the terms under which they would be amenable to collapsing the dual-class structure. 

The Independent Committee and RMS, advised by its financial advisor Morgan Stanley and legal advisor Fried Frank Harris Shriver & Jacobson LLP, engaged in good faith negotiations, but ultimately were unable to reach an agreement at this time on mutually acceptable terms. As a result, Forest City will not be submitting a proposal to shareholders to eliminate the dual-class structure at this time.

"Over the last two months, we have worked with our advisors to evaluate all options available to Forest City with regard to collapsing the dual-class structure of our stock," said Dr. Cowen. "We appreciate the willingness of RMS to work towards a mutually agreeable resolution that is in the best interests of all shareholders. The Independent Committee looks forward to keeping an open dialogue with RMS on this important topic." 

Charles A. Ratner, chairman of the Company and a General Partner of RMS commented, "We remain open to continuing discussion around the Company's dual-class structure and to finding a way forward that is fair to all shareholders. The Board of Directors, RMS and management are committed to doing all we can to enhance value for all shareholders, and RMS looks forward to maintaining an open dialogue with the Independent Committee on the possibility of eliminating the Company's dual-class stock structure in the future. This team has taken significant steps to work towards closing the gap between the net asset value and the share trading price by executing on the Company's strategic plan to build a strong sustainable capital structure, focus on core markets and products, and achieve operational excellence. We believe that this work has established a strong foundation for further progress and future growth."

Forest City is scheduled to announce its third quarter earnings results after market close on November 3, 2016.

About Forest City
Forest City Realty Trust, Inc. is an NYSE-listed national real estate company with $8.9 billion in consolidated assets. The company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate throughout the United States. For more information, visit www.forestcity.net.

Safe Harbor Language
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to future, not past, events and often address our expected future actions and expected future business and financial performance. These forward-looking statements are not guarantees of future events and involve risks, uncertainties and assumptions that are difficult to predict. All statements regarding the potential collapse of our dual-class share structure, the merits of collapsing our dual-class share structure (if any), and the likelihood and timing of any transaction collapsing our dual-class share structure are forward-looking statements. Forward-looking statements may be identified by the use of words, such as "believe", "expect", "anticipate", "intend", "depend", "should", "plan", "estimated", "predict", "could", "may", "subject to", "continues", "growing", "prospective", "forecast", "projected", "purport", "might", "if", "contemplate", "potential", "pending," "target", "goals", "scheduled", "will likely be", and similar words and phrases. Discussions of strategies, plans or intentions often contain forward-looking statements. Actual results, developments and business decisions may differ materially from those expressed or implied by such forward-looking statements. Important factors, among others, that could cause the Company's actual results and future actions to differ materially from those described in forward-looking statements include, but are not limited to: its ability to qualify or to remain qualified as a REIT, its ability to satisfy REIT distribution requirements, the impact of issuing equity, debt or both, and selling assets to satisfy its future distributions required as a REIT or to fund capital expenditures, future growth and expansion initiatives, the impact of the amount and timing of any future distributions, the impact from complying with REIT qualification requirements limiting its flexibility or causing it to forego otherwise attractive opportunities beyond rental real estate operations, the impact of complying with the REIT requirements related to hedging, its lack of experience operating as a REIT, legislative, administrative, regulatory or other actions affecting REITs, including positions taken by the Internal Revenue Service, the possibility that its Board of Directors will unilaterally revoke its REIT election, the possibility that the anticipated benefits of qualifying as a REIT will not be realized, or will not be realized within the expected time period, the impact of current lending and capital market conditions on its liquidity, its ability to finance or refinance projects or repay its debt, the impact of the slow economic recovery on the ownership, development and management of its commercial real estate portfolio, general real estate investment and development risks, using modular construction as a new construction methodology, litigation risks, vacancies in its properties, risks associated with developing and managing properties in partnership with others, competition, its ability to renew leases or re-lease spaces as leases expire, illiquidity of real estate investments, bankruptcy or defaults of tenants, anchor store consolidations or closings, the impact of terrorist acts and other armed conflicts, its substantial debt leverage and the ability to obtain and service debt, the impact of restrictions imposed by its revolving credit facility, term loan facility and senior debt, exposure to hedging agreements, the level and volatility of interest rates, the continued availability of tax-exempt government financing, its ability to receive payment on the notes receivable issued by Onexim in connection with their purchase of the company's interests in the Barclays Center and the Nets, the impact of credit rating downgrades, effects of uninsured or underinsured losses, effects of a downgrade or failure of its insurance carriers, environmental liabilities, competing interest of its directors and executive officers, the ability to recruit and retain key personnel, risks associated with the sale of tax credits, downturns in the housing market, the ability to maintain effective internal controls, compliance with governmental regulations, increased legislative and regulatory scrutiny of the financial services industry, changes in federal, state or local tax laws, volatility in the market price of its publicly traded securities, inflation risks, cybersecurity risks, cyber incidents, conflicts of interest, and risks related to its organizational structure including operating through its Operating Partnership and its UPREIT structure. These risks and uncertainties, as well as others, are discussed in more detail in our documents filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2015, our quarterly reports on Form 10-Q, and our Current Reports on Form 8-K. We expressly disclaim any obligation to update any forward-looking statement contained in this news release to reflect events or circumstances that may arise after the date hereof, all of which are expressly qualified by the foregoing, other than as required by applicable law.

On the Web: www.forestcity.net

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SOURCE Forest City Realty Trust, Inc.

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