Apollo Commercial Shareholders Approve Complete Liquidation

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Apollo Commercial Real Estate Finance shareholders have approved the dissolution of the publicly traded commercial mortgage REIT, clearing the central shareholder hurdle for a wind-down that the company expects could run into the first half of 2028.

At a Sept. 29 special meeting, 72,217,727 shares voted for the Plan of Complete Liquidation and Dissolution, while 799,088 voted against it and 439,400 abstained, according to the company’s Sept. 29 Form 8-K. A total of 73,456,215 shares were represented at the meeting, about 57.1% of the shares entitled to vote.

The vote authorizes Apollo Commercial Real Estate Finance, or ARI, to dissolve, liquidate its remaining assets and wind up its business. It follows an extraordinary restructuring year in which the company exited the commercial mortgage loan portfolio that had defined its business.

The outcome does not mean shareholders receive a fixed liquidation payment or that the company disappears immediately. ARI’s estimates remain subject to asset-sale proceeds, liabilities, expenses, market conditions and other risks during the wind-down.

ARI estimates another $7.75 to $8.50 per share

In its definitive proxy statement, ARI estimated aggregate liquidating distributions of $7.75 to $8.50 per common share on a fully diluted basis, assuming a complete liquidation by the first half of 2028.

That range includes an anticipated initial cash distribution but excludes the $3.75-per-share dividend paid July 15. Including that July payment, management estimated total book value per share returned to shareholders following the earlier asset sale at $11.50 to $12.25.

Those figures are estimates, not guaranteed proceeds. ARI warned shareholders in the proxy that it cannot predict the amount of liquidating distributions with certainty.

The company said it anticipated an initial cash liquidating distribution of approximately $3.70 to $4.00 per share. The board retains discretion over distributions, and the timing and ultimate proceeds depend on execution of the liquidation plan and applicable law.

A roughly $9 billion loan portfolio already left the balance sheet

The liquidation follows ARI’s decision earlier this year to sell its commercial real estate loan portfolio to Athene Holding Ltd., an Apollo affiliate.

When the transaction was announced in January, ARI described the portfolio as approximately $9 billion and said the purchase price would be based on 99.7% of total loan commitments, net of asset-specific credit-loss reserves, with two loans expected to be repaid before closing.

ARI subsequently reported that the sale closed April 24. In its second-quarter results, the company said it recorded realized losses associated with the portfolio sale and the extinguishment of debt.

The original strategy was not necessarily liquidation. In January, management said it intended to evaluate new commercial real estate strategies and possible M&A transactions after the portfolio sale. By June, after reviewing strategic alternatives, the board had concluded that dissolution, liquidation and a wind-down were in shareholders’ best interests and sent the plan to a vote.

That shareholder approval arrived Tuesday.

External manager waives termination fee

ARI also entered a termination agreement Sept. 29 with ACREFI Management LLC, its external manager and an indirect Apollo subsidiary.

Under the agreement, the management contract will terminate when ARI’s articles of dissolution are accepted for record by Maryland’s State Department of Assessments and Taxation and become effective. The manager waived its right to a termination fee. ARI remains responsible for accrued unpaid compensation and reimbursable expenses covered by the agreement.

The shareholder vote also approved, on an advisory and nonbinding basis, compensation that could become payable to named executive officers in connection with the liquidation plan. That proposal received 68,240,751 votes in favor, 4,229,423 against and 986,035 abstentions.

What remains after the vote

Shareholder approval resolves the principal corporate vote identified in the proxy, but the liquidation still requires execution.

The plan gives ARI authority to dispose of remaining assets, settle or make provision for liabilities, distribute available proceeds and complete the legal dissolution. The company may ultimately transfer remaining assets and liabilities to a liquidating trust. Interests in such a trust could be nontransferable, according to the proxy.

The timetable matters because ARI’s distribution estimates assume the liquidation is completed by the first half of 2028. Changes in the value of remaining real estate, costs, claims, taxes or other liabilities could alter both the timing and the amount ultimately returned.

For the commercial mortgage market, the vote completes another major step in the dismantling of a lender that entered 2026 with an approximately $9 billion commercial real estate loan portfolio. That portfolio has already been sold. Shareholders have now authorized the company itself to wind down.