<SEC-DOCUMENT>0001096906-24-001845.txt : 20240911
<SEC-HEADER>0001096906-24-001845.hdr.sgml : 20240911
<ACCEPTANCE-DATETIME>20240911172306
ACCESSION NUMBER:		0001096906-24-001845
CONFORMED SUBMISSION TYPE:	PX14A6G
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20240911
DATE AS OF CHANGE:		20240911
EFFECTIVENESS DATE:		20240911

SUBJECT COMPANY:	

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Braemar Hotels & Resorts Inc.
		CENTRAL INDEX KEY:			0001574085
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		ORGANIZATION NAME:           	05 Real Estate & Construction
		IRS NUMBER:				462488594
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		PX14A6G
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-35972
		FILM NUMBER:		241293324

	BUSINESS ADDRESS:	
		STREET 1:		14185 DALLAS PARKWAY
		STREET 2:		SUITE 1100
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75254
		BUSINESS PHONE:		(972) 490-9600

	MAIL ADDRESS:	
		STREET 1:		14185 DALLAS PARKWAY
		STREET 2:		SUITE 1100
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75254

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Ashford Hospitality Prime, Inc.
		DATE OF NAME CHANGE:	20130410

FILED BY:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BRANCOUS LP1
		CENTRAL INDEX KEY:			0002037158
		ORGANIZATION NAME:           	
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			A6
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		PX14A6G

	BUSINESS ADDRESS:	
		STREET 1:		56A MILL ST E
		STREET 2:		290
		CITY:			ONTARIO
		STATE:			Z4
		ZIP:			L7J 1H3
		BUSINESS PHONE:		00447508988498

	MAIL ADDRESS:	
		STREET 1:		56A MILL ST E
		STREET 2:		290
		CITY:			ONTARIO
		STATE:			Z4
		ZIP:			L7J 1H3
</SEC-HEADER>
<DOCUMENT>
<TYPE>PX14A6G
<SEQUENCE>1
<FILENAME>bran_px14a6g.htm
<DESCRIPTION>BRANCOUS LP1 FORM PX14A6G
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<DIV style=margin-left:72pt;width:468pt><P align=center style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'><B>SECURITIES &amp; EXCHANGE COMMISSION</B></P>
<P align=center style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'><B>WASHINGTON, D.C. 20549</B></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'>&nbsp;</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'>&nbsp;</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'>NOTICE OF EXEMPT SOLICITATION (VOLUNTARY SUBMISSION)</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'>&nbsp;</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'>NAME OF REGISTRANT: Braemar Hotels &amp; Resorts Inc.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'>CIK: 1574085</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'>NAME OF PERSON RELYING ON EXEMPTION: Brancous LP1</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'>ADDRESS OF PERSON RELYING ON EXEMPTION: 56A Mill St E #290, Acton, Ontario L7J 1H3, Canada</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'>&nbsp;</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'>Written materials are submitted pursuant to Rule 14a-6(g)(1) promulgated under the Securities Exchange Act of 1934:</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'>&nbsp;</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'>&#8226; Letter to Shareholders dated September 4, 2024</P>
<HR style='page-break-after:always;border:0;height:3pt;background-color:#909090;margin:8pt 0'><P style=line-height:0;margin:0></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>Fellow Shareholders,</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>As an investor with a significant stake in Braemar Hotels &amp; Resorts (BHR), I am writing to express my deep concerns regarding the state of corporate governance at BHR. It is my belief, shared by many other shareholders, that the upcoming shareholders' meeting on October 15th, 2024, will be a defining moment for the future of our investment.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>I am urging all shareholders to carefully consider the issues outlined below and to <B>vote against the current board</B> at the upcoming meeting. The reasons for this stance are clear:</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'><B>Lack of Independent Directors</B></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>The most glaring issue with BHR&#8217;s current board is the <B>lack of truly independent directors</B>. The board has consistently acted in favor of Ashford Inc., rather than in the best interests of BHR shareholders. This is most clearly demonstrated by the <B>2018 Amended Management Agreement</B>, which granted Ashford an <B>80-year contract</B> that BHR can only terminate under extreme circumstances such as wrongdoing. This agreement effectively locks the company into a long-term arrangement that serves Ashford&#8217;s interests rather than those of the shareholders.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>Furthermore, Ashford has been permitted to award contracts to its own subsidiaries, giving them the right to match any competing offer from third parties. This practice eliminates competition and significantly impacts shareholder value.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'><B>Poor Performance and Accountability</B></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>Under <B>Monty Bennett&#8217;s leadership</B>, as the external manager for BHR, <B>Ashford Inc.</B> has overseen a <B>catastrophic 85% decline</B> in BHR&#8217;s value since its IPO and a <B>75% drop since 2019</B>. These are devastating results for shareholders, who have seen the value of their investment plummet while the broader market has performed significantly better.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>Despite this dismal performance, <B>Ashford Inc.&#8217;s management fees</B>, as well as the <B>LTIP and equity payments to senior management</B>, have continued to rise steadily. On top of that, <B>Monty Bennett</B> has received substantial compensation for what the board has labeled &quot;exceptional service,&quot; even though shareholders have borne the brunt of these losses.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>With results like these, the logical course of action would be to <B>fire the manager</B>, just as you would with any underperforming asset manager. <B>Monty Bennett and his team</B> should be held accountable for their underperformance and <B>replaced</B> to protect shareholder value and ensure the future success of BHR.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>It is worth noting that earlier this year, <B>Institutional Shareholder Services (ISS)</B>, a leading proxy advisory firm, <B>recommended shareholders vote against Bennett and his colleague</B>, further reinforcing the point that shareholders deserve better leadership. This independent evaluation highlights the widespread acknowledgment that Bennett's continued leadership is detrimental to shareholder value.</P>
<HR style='page-break-after:always;border:0;height:3pt;background-color:#909090;margin:8pt 0'><P style=line-height:0;margin:0></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'><B>Excessive Termination Fee</B></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>The <B>termination fee</B> tied to this management agreement is another major concern. This fee is <B>excessive</B>, even <B>greater than BHR&#8217;s current market capitalization</B>. The termination fee is calculated as <B>12 times net earnings</B>, not only for advisory services but for all contracts awarded to Ashford subsidiaries, inflating the total amount to an outrageous level. This fee structure makes it virtually impossible to terminate the contract and ensures Ashford&#8217;s stranglehold on BHR, further jeopardizing shareholder value.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>It&#8217;s worth remembering that in <B>2016</B>, during discussions with the Weisman Group, <B>Monty Bennett</B> and the board were willing to accept a <B>$70 million termination fee</B> for Ashford Inc. as part of a deal to sell Ashford Prime at $20.58 per share. This begs the question: if Monty Bennett was prepared to negotiate then, why is he demanding a termination fee that exceeds the entire market capitalization of BHR today? Why won&#8217;t he negotiate with shareholders now and allow us to take control of <B>our company</B>? This refusal to engage in reasonable discussions further proves the board's unwillingness to act in our best interest.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'><B>Conflicts of Interest and Recent Debt Issuances</B></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>A clear example of how these conflicts of interest harm shareholders is the <B>recent CMBS offering</B>. The spread on the triple-A tranche of the offering was the highest of all issuances this year, reflecting the market&#8217;s concerns over the company&#8217;s debt structure. This was in part due to <B>Lismore</B>, a subsidiary of Ashford, receiving a significant commission for its role in the debt issuance. This demonstrates the self-serving nature of these arrangements and the board's failure to act in the best interests of shareholders.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'><B>Manipulative Agreement with Blackwells</B></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>Additionally, the <B>agreement between Blackwells and BHR</B> raises significant red flags. Not only did BHR cover all of Blackwells&#8217; legal fees, but the board also approved a loan to Blackwells at a lower interest rate than BHR itself borrows at. This loan allowed Blackwells to purchase shares and subsequently vote in line with the board&#8217;s proposals. This move essentially <B>bought votes</B> to protect the current board, further showing the lengths the board will go to entrench itself.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'><B>Preferred Shares and Dilution Risk</B></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>There is also a significant risk posed by the <B>Preferred Shares M and E</B> and their <B>change of control clause</B>. If triggered, this clause would cause massive dilution of the common shareholders, especially at a price above <B>$4.40 per share</B>, making it nearly impossible for shareholders to realize any meaningful return in the event of a sale or merger of the company. This clause creates an artificial ceiling on shareholder value.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>It is worth noting that <B>Ashford Hospitality Trust (AHT)&#8217;s preferred shares do not contain this restrictive clause</B>, further highlighting the unfavorable position that BHR shareholders are placed in by this board.</P>
<HR style='page-break-after:always;border:0;height:3pt;background-color:#909090;margin:8pt 0'><P style=line-height:0;margin:0></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'><B>The Board&#8217;s Disconnect from Shareholders</B></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>Recent events have shown just how disconnected BHR&#8217;s board is from the interests of its shareholders, similar to what was witnessed at <B>Ashford Hospitality Trust (AHT)</B>. In AHT&#8217;s <B>most recent annual shareholder meeting</B>, <B>Monty Bennett</B> failed to receive enough votes to be re-elected to the board. However, in a blatant disregard for shareholder sentiment, the <B>surviving board members swiftly re-appointed him</B> to his position shortly after the vote. This move undermined the voice of shareholders and demonstrated the lengths to which entrenched boards will go to maintain control.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>This mirrors the situation at BHR in <B>2016</B>, when shareholders withheld their votes for the board, yet no changes were made. <B>This ongoing disregard for shareholder will must stop</B>. The company belongs to its shareholders, not to a board that makes decisions in its own favor. It is especially concerning that the board itself <B>owns very few shares</B>, with most of its holdings coming from <B>long-term incentive plans (LTIPs)</B> and <B>equity grants</B>. This lack of personal investment underscores the board's misalignment with shareholder interests.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'><B>Brancous LP1&#8217;s Commitment to Change</B></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>At <B>Brancous LP1</B>, we are fully prepared to support real change by proposing <B>new, truly independent directors</B> at the 2025 shareholders' meeting. We strongly believe that <B>shareholder interests must be prioritized</B> and that BHR should be put on a path to deliver sustainable, long-term value. This company must be governed by those who are genuinely invested in its success, not by a board that seeks to entrench itself at the expense of shareholders.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>Additionally, we <B>reserve the right to take legal action</B> against the board if necessary, to ensure that shareholder rights are protected and that the board fulfills its fiduciary duty to act in the best interests of the company and its shareholders.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'><B>Final Thoughts</B></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>We are available to discuss these concerns with all shareholders should anyone wish to further explore the details presented here. I believe we can push for a brighter future for BHR, one that is focused on maximizing shareholder value rather than protecting the interests of an entrenched board.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>Fellow shareholders, I strongly urge you to <B>vote against the current board</B> on October 15th. The time for change is now.</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>Sincerely,<BR></P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:5pt;margin-bottom:5pt'>Alejandro Malbran<BR>amalbran@knidianmd.com</P>
<P style='font:10pt stHtmlOvrFontNm;margin-top:0pt;margin-bottom:8pt'>&nbsp;</P>
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