Esopus demands Syms come clean about development plans for lower Manhattan property

By Lisa Kerner

Charlotte, N.C., April 29 - Syms Corp. shareholder Esopus Creek Value LP demanded that the company disclose its development intentions for 42 Trinity Place in lower Manhattan.

In a letter to Syms, Esopus said it found a municipal public record that shows the company plans to create a large residential/commercial development complex on the site. The shareholder accused the company of failing to inform its minority shareholders of its intention and said a zoning lot development agreement with the city of New York has been in place for four months.

The agreement was executed by Syms former chief financial officer and former board member Antoine Moreira who resigned, Esopus said, after the investor filed a lawsuit against the company's board of directors.

Esopus is in favor of developing the property into a valuable residential or commercial complex, but the investor questions why the Syms board is hiding material information from its minority shareholders.

"Minority shareholders should not have to don miner hats and delve into arcane municipal public records in order to ascertain the true activities of the companies in which they invest," Esopus said.

According to Esopus, Syms' intentions to develop the 42 Trinity parcel were formulated more than one month prior to the board's announcement that it decided to de-register Syms shares.

Esopus said that Syms "continues to represent itself as a pure 'off-price retailer' as opposed to a company that has intentions to engage in a large-scale residential/commercial real estate project on its most valuable piece of owned real estate."

The letter noted that Esopus, along with related accounts, beneficially owns 549,200 shares, or 3.76%, of Syms' outstanding common stock, or some 8.76% of the non-controlled shares of the company.

It was previously reported that Esopus had asked the company's board for full appraisal of the value of Syms' real estate as well as an "exhaustive review" of the performance of each of the company's stores.

In April, Esopus requested that Syms close those stores that do not generate cash flow in excess of the cash flow that could be generated if the locations were developed or leased.

Esopus said the directors made the decision to deregister and delist the shares in December on the recommendation of Syms' controlling stockholder despite objection by Esopus and other large minority holders.

The investor had been part of a group that in January suggested fellow shareholders register some of their Syms shares in their own names in an attempt to stop Syms from deregistering.

Syms is a Secaucus, N.J.-based off-price retailer.

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