Charles Frischer urges Regional Health Properties (RHEP) to Engage on 99% Premium Offer

M. Cap: $5mm | Regional Health Properties  through its subsidiaries own and manage skilled nursing facilities and assisted living facilities in the states of Alabama, Arkansas, Georgia, Missouri, North Carolina, Ohio, Oklahoma, and South Carolina.

On June 18, 2025, Charles Frischer (7.4%) sent a letter to the Board criticizing CEO Brent Morrison for not engaging with a May 6, 2025 asset purchase offer that reflected a 99% premium to the share price. He urged the Board to begin negotiations.

Past

(i)  Charles Frischer

On November 28, 2018, Charles Frischer (12.18%) and three other holders of the Preferred Stock, who together with Mr. Frischer in the aggregate hold 26.18% of the Preferred Stock, sent a letter demanding a special meeting of the holders of the Preferred Stock be called for the purpose of electing two additional directors. Source

On December 2, 2019, attorneys for Charles Frischer and four other holders of the Preferred Stock, who, together with Mr. Frischer, hold 32.6% of the Preferred Stock, sent a letter demanding the company, correct a misrepresentation in the company’s Proxy Statement. The Proxy Statement stated that no demand had been made for the special election of two additional directors by the holders of at least 25% of the Preferred Stock following a failure by the company to pay dividends for any four consecutive or non-consecutive dividends period. Such a demand, however, was made in that certain letter to the company dated November 28, 2018 from attorneys representing Charles Frischer and three other holders who together held 26.28% of the Preferred Stock. Such letter is described in Item 4 to Amendment No. 3 to the 13D. In addition to correcting the Proxy Statement, Mr. Frischer and the other holders reiterated their demand for a special election for two additional directors. The letter further requested that Mr. Charles Frischer and Mr. Kenneth Grossman be nominated to stand for election by the holders of the Preferred Stock to serve as directors of the company. Source

On June 1, 2021, the company announced that it has filed a registration statement on Form S-4 with SEC relating to its proposed offer to exchange any and all of the outstanding shares of its 10.875% Series A Cumulative Redeemable Preferred Shares for newly issued common stock of the Company, no par value and may file amendments thereto. In exchange for each share of Series A Preferred Stock properly tendered in the Exchange Offer and accepted by the Company, participating holders of Series A Preferred Stock will receive 0.5 shares of Common Stock.

On June 2, 2021, Charles Frischer sent a letter in response to the draft S-4 Registration Statement the company filed on June 1, 2021. In such letter, Mr. Frischer notified the company of that the proposed exchange offer was woefully inadequate. 

On July 1, 2021, Charles Frischer (14.2%) sent a letter to the company requesting, that the company call a special meeting of the holders of shares of 10.875% Series A Cumulative Redeemable Preferred Stock of the company for the purpose of electing two directors to the Board. The letter further requested that after the company has received requesters from holders of greater than 25% of the shares of the Preferred Stock, the company set a date for the referenced special meeting not greater than seventy five (75) days after the receipt of the sufficient number of such requests. Source

(ii)              Park City Capital

Between 2013 and 2017, Park City Capital, a 5.2% holder later increasing to 7.1%, pushed for value unlock and governance changes. It argued the company was worth at least $13/share, proposed a REIT conversion, and secured a board seat for its CEO, Mr. Fox. In 2017, after tendering its convertible notes, Park City (6.1%) publicly called for CEO William McBride’s resignation due to resume falsification. The Board later terminated McBride for cause following an internal investigation confirming he misrepresented having an MBA from UCLA.. 

(iii)            Ephraim Fields

In March 2016, Ephraim Fields (3.3%) urged the board to unlock value by selling ADK in whole or parts, halting acquisitions, and using excess cash for buybacks. Shortly after, the company announced it was exploring strategic alternatives and would hire legal and financial advisers. It also began divesting non-core assets, including a $55 million sale of nine Arkansas properties in September 2016. Fields later reduced his stake to 3.2%.

(iv)            Doucet Asset Management

Between 2014 and 2016, Doucet Asset Management, holding up to 8.4%, repeatedly urged the company to explore strategic alternatives, estimating asset sale values between $6.44 and $9.00 per share. In response, the company announced a transition to a healthcare property holding and leasing model in July 2014. Doucet later supported the buyback plan and reiterated its view that selling the company would unlock maximum value, suggesting board replacement if its plan was not pursued.