Investors have approved a settlement agreement that will bring new management to land deals arranged by Rep. Robert Pittenger’s former real estate company, according to an email sent to investors Tuesday.
The vote, which concluded Friday, is the latest twist in a long-running drama over the future of the company. In August, the Charlotte Republican, who is running for a third term, disclosed the company was the subject of a federal investigation, but he has repeatedly denied any wrongdoing.
Under the pact, investors agreed to forgo potential legal claims against Pittenger Land Investments in return for PLI’s turning over control of the investments to Charlotte-based real estate firm South Street Partners. PLI is to receive $6 million in the deal but will give up an investment stake that could be worth as much as $30 million, according to notices sent to investors.
Investors in 51 of the 52 land deals approved the settlement, and on Saturday, PLI agreed to move forward with the management change, according to an email sent to investors that was obtained by the Observer. Investors in one of the deals – a joint venture called Providence Road-Marvin Weddington Road – did not approve the transaction.
Attorneys who negotiated the deal for a group of major investors had raised concerns about the company’s operations, including undocumented expenses, undisclosed loans and markups applied to land purchases, according to documents sent to investors in March. An Observer story in August detailed markups that were applied to more than a half dozen of the deals.
“This resolution is the best possible outcome for investors under the circumstances, and we’re ready to go forward,” said Adam Doerr, a Robinson, Bradshaw & Hinson attorney who represented the Vineyard family, one of the investor groups involved in the deal.
Pittenger started the company in 1985 but transferred management to his wife, Suzanne, in 2012 after he was elected to Congress to meet House ethics rules. Over the years, PLI has gathered investors to buy raw land with the objective of later selling the property to developers.
In recent months, some investors have complained about the slow pace of land sales and what they called a lack of transparency around PLI’s operations. Suzanne Pittenger has said she believed PLI has “always acted in the best interest” of the company’s investors.
South Street now has a month to further examine PLI’s books before completing the deal, which is expected to close by May 31. PLI investors voted down a pact with South Street in December, but major investors negotiated a new deal that went up for a vote starting in March.
“PLI began its search to find new management over three years ago, and initially contacted South Street about assuming this role,” PLI said in a statement. “As such, PLI is very pleased with the outcome of the vote. PLI also appreciates the many letters of investor support that it has received.”
The Observer has previously reported that federal investigators are looking into personal loans and contributions Pittenger made to his 2012 congressional campaign. The FBI and IRS are examining whether Pittenger improperly transferred the money from PLI.
Pittenger’s attorney, Ken Bell, has said that he has not seen anything that “even suggests criminal activity” by his client and that he hopes authorities “act quickly and publicly to absolve” the congressman.