NEW YORK CITY—American Realty Capital Properties said Monday that “there is absolutely no basis” for RCS Capital Corp. to terminate its agreement to buy Cole Capital Partners and Cole Capital Advisers from ARCP. The net lease REIT's counter-statement came a few hours after RCAP announced it was pulling the plug on the $700-million deal, originally made public on Oct. 1. RCAP's announcement Monday morning offered no reason for terminating the agreement.

“In the middle of the night, we received a letter” from RCAP terminating the agreement to acquire Cole Capital, according to a statement from ARCP. Since there's no basis for RCAP to do so, the ARCP statement says, its attempt to terminate the deal “constitutes a breach of the agreement. In addition, we believe that RCS's unilateral public announcement is a violation of its agreement with ARCP.”

The independent members of the company's board as well as its management are “evaluating all alternatives under the agreement and with respect to the Cole Capital business, generally.” Nicholas Schorsch, who founded both companies, serves as chairman of the board at ARCP and executive chairman at RCAP, although the two entities are separate.

Also terminated Monday, at least as far as RCAP is concerned, were the interim sub-advisory agreements reached on Oct. 22 among RCAP and the five non-traded REITs sponsored and advised by Cole Capital. Additionally, RCAP terminated the wholesaling agreements between subsidiary Realty Capital Securities LLC and Cole Capital subsidiary Cole Capital Corp. for three non-traded REITs.

As recently as this past Wednesday, ARCP—which saw its CFO and chief accounting officer resign earlier that day over accounting irregularities—had reason to believe the Cole Capital sale was still on track. In announcing the resignations of CFO Brian Block and chief accounting officer Lisa McAlister, the company said the Cole Capital deal was unaffected, while in a webcast that afternoon, CEO David S. Kay said the REIT had “simplified the business. We are not only selling our multitenant division, netting $1.4 billion last week that we received, but we have also contracted to sell Cole Capital, our broker-dealer, in an effort to continue to increase transparency and simplify the business.”

Separately, Cole Capital said Monday that Simon J. Misselbrook was expected to serve as CFO for all five of its non-traded REITs. Currently he's CFO of Cole Credit Property Trust IV, Cole Credit Property Trust V and Cole Real Estate Income Strategy, but with Gavin Brandon succeeding McAlister at ARCP, Misselbrook will also assume Brandon's Cole Capital duties on Cole Office & Industrial REIT and Cole Corporate Income Trust.