Boardroom Battle Engulfs Scully Royalty After Contested Election

STUART, FL – December 29, 2025 – A fierce corporate governance battle has erupted at Scully Royalty Ltd. (NYSE: SRL), plunging the company into a state of uncertainty after an activist shareholder, MILFAM LLC, declared it had successfully replaced the entire board of directors at a contested Annual General Meeting (AGM). Scully Royalty's incumbent board, however, vehemently disputes the claim, stating the meeting was postponed and any actions taken were invalid, setting the stage for a protracted legal and corporate struggle.

The conflict reached a boiling point on Saturday, December 27, when MILFAM, a single-family office holding 12.9% of Scully's shares, proceeded with the scheduled AGM despite the company's official announcement of a postponement. According to a press release from the activist investor, the meeting was held outside the designated venue, which they found locked. MILFAM asserts that a quorum was present and that all five of its nominees were elected to the board, while the incumbent directors failed to secure a majority of votes.

A Meeting in Dispute

The schism centers on the legitimacy of the December 27th gathering. On December 24, Scully Royalty announced it was temporarily postponing the AGM. The company reiterated this decision on December 29, stating the delay was necessary to await a decision from the Cayman Islands Court of Appeal.

This legal challenge is the root of the conflict. Scully Royalty had initially deemed MILFAM's director nominations invalid, citing a failure to comply with the company's advance notice provisions. MILFAM contested this in court, and on December 19, the Grand Court of the Cayman Islands issued an order declaring the activist's nomination notice valid. Unwilling to accept the ruling, Scully Royalty immediately launched an appeal.

In its official statements, the company argued that postponing the AGM was in the best interest of all shareholders, providing time to resolve the legal uncertainty surrounding the nominations and ensure an "orderly meeting." Scully Royalty has urged its shareholders to disregard MILFAM's claims, stating the incumbent board remains in place and that an official date for the rescheduled AGM will be announced in due course.

MILFAM, however, characterized the postponement as a "purported and invalid attempt" by the incumbent board to entrench itself. The activist firm proceeded with the meeting, leading to the current standoff where two separate groups now claim to be the legitimate governing body of Scully Royalty Ltd.

The Activist's Playbook

This dramatic move is the culmination of an escalating campaign by MILFAM LLC, a Florida-based single-family office that manages the assets for the descendants of Lloyd I. Miller Jr. The firm, which has a long-term investment focus, has positioned itself as a champion for shareholder rights, aiming to install a board that will bring a "renewed focus on operational and capital efficiency" to Scully Royalty.

The slate of directors MILFAM claims to have installed brings a mix of financial, operational, and real estate expertise. The new board members are Jerrod Freund, Mark Holliday, Alan Howe, Nimesh Patel, and Skyler Wichers.

Among them, several have notable backgrounds. Alan B. Howe has over 30 years of experience in corporate finance and governance and, according to Scully's own SEC filings, has a "long standing service to the MILFAM group," including nearly two decades as a director of a MILFAM-affiliated entity. Skyler Wichers is a Portfolio Manager and Vice President at MILFAM itself, signaling the activist's direct involvement in the future strategy. Perhaps the most prominent name is Marc Holliday, the Chairman and CEO of SL Green Realty Corp., New York City's largest office landlord. His inclusion suggests a potential focus on optimizing Scully's asset base and capital structure.

Seeds of Shareholder Discontent

The activist campaign did not arise in a vacuum. Scully Royalty, which is incorporated in the Cayman Islands but headquartered in Shanghai, has faced significant financial headwinds. The company's primary asset is an iron ore royalty interest in Canada, making its performance susceptible to commodity price fluctuations.

For the full fiscal year 2024, Scully reported a net loss of CA$20.6 million, a stark reversal from the CA$1.39 million profit recorded in the previous year. Revenue also saw a steep 36% decline to CA$35.3 million. This downturn in performance likely fueled shareholder dissatisfaction and created a fertile ground for an activist challenge.

As a foreign private issuer, Scully Royalty is also exempt from certain NYSE corporate governance standards that apply to U.S. companies, a factor that can sometimes draw scrutiny from activist investors concerned about board accountability and shareholder alignment. MILFAM's campaign, centered on achieving "fair representation for all shareholders," directly targets these governance concerns.

An Uncertain Path Forward

With two groups claiming control, the immediate future of Scully Royalty is shrouded in ambiguity. The newly declared board from MILFAM has stated it is "pursuing a transition plan," but the execution of any such plan is impossible while the incumbent board and the company itself refuse to recognize their authority.

The next critical step will likely be a ruling from the Cayman Islands Court of Appeal on the validity of MILFAM's nominations. This decision could either validate MILFAM's position or bolster the incumbent board's argument that the December 27 meeting was illegitimate.

Such proxy battles are a hallmark of shareholder activism, though they rarely result in such a dramatic and public split over the legitimacy of a shareholder meeting itself. Precedents in the market show that even unsuccessful activist campaigns can often force significant changes in strategy or governance. For Scully Royalty shareholders, employees, and partners, the current power struggle creates a period of high risk and uncertainty until the legal system and the company's own bylaws can provide a definitive answer as to who is truly in control of the boardroom.