GlobeSt.com UPDATE: Ford Can Hold Highest Stake in ARC

DENVER-The board of Affordable Residential Communities voted to allow Gerald J. Ford, a Dallas billionaire who made his wealth in financial institutions, to increase his ownership in the company to 19.9%. Ford recently agreed to join the board, along with two people he designated. The board, however, also voted that other than Ford and certain affiliated parties, to limit the ownership of other investors to 7.3% from the previous limit of 9.8%. Ford currently owns 9.5% of the company.

“As a result, no individual other than Mr. Ford may, without board approval, own or be deemed to own,” more than the new maximum limit, according to a filing with the Securities and Exchange Commission. “Any attempted transfer of ARC’s common stock which, if effective, would result in any individual owning shares of ARC’s common stock in excess of the 7.3% ownership limit or would otherwise result in ARC’s failing to qualify as a REIT.”

It also will result in the number of shares causing the violation, rounded to the nearest whole share, to be automatically transferred to a trust for the exclusive benefit of one or more qualifying charitable organizations to be designated by ARC, and the intended transferee will acquire no rights to the stock, according to the SEC document. The new rule applies to individuals, but generally not to entities such as corporations, partnerships or limited liability companies. Any individual stockholder who currently owns between 7.3% and 9.8% of the stock will be permitted to maintain the holdings.