The REIT confirmed last Friday that one of its biggest preferredstockholders, Westbrook Partners, has notified the company thatWestbrook is exercising its "change of control preference" right—amove that could force Burnham Pacific to stop paying common sharedividends until it buys out the stockholder.

The announcement was the latest in a series of hits to thecompany, which has seen its stock price erode steadily in recentmonths. The REIT is looking for a suitor, weighing the sale ofassets and considering other moves to stop the decline.

The battle with the preferred stockholders comes as a group leadby Ohio-based real estate investor Jay Schottenstein is stepping upits effort to take control of Burnham Pacific's board and replacemanagement. Schottenstein offered to buy the company for $13.50 ashare last summer, but the board said the price was too low.