UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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Securities Exchange Act of 1934

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¨ Soliciting Material Pursuant to §240.14a-12

COMMONWEALTH REIT

(Name of the Registrant as Specified In Its Charter)

CORVEX MANAGEMENT LP

KEITH MEISTER

RELATED FUND MANAGEMENT, LLC

RELATED REAL ESTATE RECOVERY FUND GP-A, LLC

RELATED REAL ESTATE RECOVERY FUND GP, L.P.

RELATED REAL ESTATE RECOVERY FUND, L.P.

RRERF ACQUISITION, LLC

JEFF T. BLAU

RICHARD O’TOOLE

DAVID R. JOHNSON

JAMES CORL

EDWARD GLICKMAN

PETER LINNEMAN

JIM LOZIER

KENNETH SHEA

EGI-CW HOLDINGS, L.L.C.

DAVID HELFAND

SAMUEL ZELL

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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The Portnoys Unsuccessfully Try To Change Maryland Law

A

Case

Study

On

The

Portnoys’

True

Intentions

And

The

Pernicious

Effects Of External Management

2

Introduction

•

One of the most outrageous tactics the Portnoys employed to preserve their fee stream was a

clandestine lobbying effort to amend a Maryland statute during the 2013 legislative session

•

The effort was intended to permanently eliminate the ability of shareholders to remove

CommonWealth trustees without cause by a two-thirds vote and was spearheaded by Barry

Portnoy, who hired lobbying firms and visited with selected legislators without any public

disclosure to CommonWealth shareholders

•

We believe this is a quintessential example of the fundamental conflict of interest plaguing CWH:

–

Why was an external service provider who holds virtually no shares in CWH actively

lobbying the government to short-circuit the Company’s 28-year charter and strip the

only right shareholders have to hold this Board accountable?

–

Why has there been no disclosure regarding the amount of shareholder funds spent

by CWH to eliminate a key right of its own shareholders?

–

Why

has

there

been

no

disclosure

regarding

who

authorized

RMR

to

undertake

these

actions and which lobbying firms have been retained?

•

Equally

appalling

was

the

manner

in

which

the

Portnoys

attempted

to

change

the

law:

by

grossly

mischaracterizing

their

proposal

as

a

mere

“clarification”

of

existing

Maryland

law

and

quietly

inserting the proposal at the 11

hour of the legislative session

–

Why did the Portnoys attempt to railroad their proposal through the Assembly at the

last minute rather than process it through the Assembly’s standard, open legislative

process?

–

Had we not been fortunate enough to hear from an assembly staffer on the day prior

to the last minute hearing, shareholders would have never been able to present their

case regarding the “clarification”

th

3

CommonWealth’s

Charter

Always

Allowed

Removal

Of

Trustees

Without

Cause

•

Since

CommonWealth’s

IPO

in

1986,

its

charter

has

unambiguously

stated

that

trustees

of

the

Company

can

be

removed

by

shareholders

without

cause

with

the

affirmative

vote

of

holders

of

2/3

of

the

outstanding

shares

•

This

fact

had

been

consistently

reflected

in

CommonWealth’s

public

filings

with

the

Securities

and

Exchange

Commission

for

almost

three

decades

(1)

Prospectus

Supplement

filed

by

CommonWealth

REIT,

dated

February

27,

2013

(See

Appendix

A)

(2)

S-3

Registration

Statement

filed

by

CommonWealth

REIT

(HRPT

Properties

Trust

at

that

time)

on

April

7,

2004

(See

Appendix

B)

4

•

On

April

4,

2013,

it

first

came

to

our

attention

that

Barry

Portnoy

and

RMR

had

hired

a

lobbying

firm in Annapolis, and had secretly been lobbying selected members of the Maryland General

Assembly

to

introduce

a

last

minute

change

to

a

pending

Senate

Bill

to

amend

various

provisions

of

the

Maryland

corporate

code

•

The proposed amendment, if approved, would have enabled Barry Portnoy and his beholden

Trustees

to

unilaterally

remove

the

“without

cause”

removal

provision

from

the

charter,

eliminating

the

right

of

CommonWealth shareholders to remove the Board with an affirmative

2/3

vote

–

Effectively,

the

Portnoys

were

attempting

to

rewrite

the

charter

to

finally

cement

their

control

over

CommonWealth

for

good

•

Barry

Portnoy,

with

the

assistance

of

CommonWealth’s conflicted Maryland counsel, grossly

mischaracterized

the

amendment

as

a

“clarification”

of

existing

law

•

Appendix

C

contains

a

copy

of

the

letter

submitted

by

RMR

itself

to

the

Maryland

Senate

Judicial

Proceedings

Committee

If

a

critical

shareholder

right

could

be

unilaterally

wiped

from

the

charter

by

the

Board,

why

was

this

highly material governance risk never disclosed in

SEC filings?

The

Portnoys’

Legislative

“Clarification”

5

•

A

hearing

was

held

by

the

Senate

Judicial

Proceedings

Committee

on

the

Portnoy

amendment

on

April

5,

2013,

one

day

after

we

first

learned

of

RMR’s

lobbying

efforts

The

Portnoys’

Legislative

“Clarification”

6

Maryland

Senators

Saw

Through

The

Portnoys’

“Clarification”

•

At

the

hearing

a

number

of

Senators

recognized

the

RMR-sponsored

amendment

for

what

it

was:

a

substantive

change

in

Maryland

law,

not

a

“clarification”

(1)

Judicial

Proceedings

Committee

of

the

Senate

of

the

Maryland

General

Assembly

on

April

5,

2013

Senator

Christopher

B.

Shank:

“…We

do

clean-up

bills

all

the

time.

We’ve

had

several

bills

dealing

with,

you

know,

dotting

some

T’s

and

–

or

dotting

some

I’s

and

crossing

some

T’s,

it

happens

all

the

time.

But

I

keep

hearing

clarification

from

the

proponents

here.

This

bill

originally

passed

in

1999.

It’s

now

2013.

It

seems

to

me

if

you

clarify

something,

you

do

it,

oh,

hey,

we

forgot

about

this,

we

probably

ought

to

do

it

a

year

later.

What

we’re

really

talking

about

here

is

it

goes

beyond

clarification,

it

is

addressing

what

is

a

contemporary

situation

and

possibly

circumventing

a

court’s

jurisdiction

on

it.

And

if

we

need

to

do

that,

and

I’m

open

to

that

idea,

that

we

need

to

do

it,

but

I

think

this

goes

well

beyond

a

clarification…”

(1)

Chairman

Brian

E.

Frosh:

“...

Well,

I

mean

the

reasons

we

are

having

a

hearing

is

because

we

know

it

is

a

substantive

change

in

the

law

and

we

want

to

get

the

two

different

sides

on

that...”

(1)

Senator

Jamin

B.

(Jamie)

Raskin:

“...I

mean

I

certainly

agree

it

is

a

substantive

change

they

are

looking

for

without

it

necessarily

being

a

complete

reversal.”

(1)

7

The

Portnoy

Amendment

Was

Not

Approved

–

Shareholder

Rights

Are

Preserved

The

Maryland

Senate

Judicial

Proceedings

Committee

did

not

approve

the

Portnoy

amendment

and

the

Maryland

corporate

statute

was

not

amended

8

Despite Their Defeat In The Senate, The Portnoys Weren’t

Done Distorting The Truth

•

Despite

their

legislative

defeat,

on

April

12,

2013,

CommonWealth

“opted-in”

anyway

to

Section

3-803

of

the

Maryland

Unsolicited

Takeovers

Act

–

the

same

statute

that

they

had just failed to “clarify”

–

In

CommonWealth’s

view,

“opting-in”

eliminated

the

right

of

CommonWealth

shareholders to remove the Trustees without cause

–

But

if

this

were

true,

why

did

CommonWealth

lobby

the

legislature

to

“clarify”

the

law and why did this attempt fail?

•

The Portnoys’

newly found interpretation of Section 3-803 was in our view preposterous

–

especially in light of decades of public disclosure by CommonWealth (which nowhere

discussed Section 3-803) and the fact that the Portnoys’

“clarifying”

amendment had just

been defeated at the legislative level

•

In

fact,

in

its

November

2013

ruling,

the

Arbitration

Panel

agreed

with

us:

–

“According to CWH’s Declaration of Trust, the Trustees can be removed at any

time

with

or

without

cause

by

two-thirds

of

the

shareholders.

The

Panel

concludes that CWH’s election to opt into Section

3-803 of MUTA does not alter

the CWH shareholders’

explicit ability under the Declaration of Trust to remove

Trustees without cause.”

9

Inescapable

Conclusions

Regarding

The

Portnoys’

True

Intentions

The Portnoys’

intentions

are

revealed

in

their

actions,

not

in

their

promises

or

what

is

written

in

their

governing

documents

•

In

attempting

to

change

the

law

in

order

to

short-circuit

the

Company’s

charter

and

avoid

subjecting

themselves

to

accountability,

the

Portnoys

have

demonstrated

they

are

not

the

typical

self-interested

market

participant

•

The

Portnoys’

extraordinary

undertaking

in

Maryland

provides

perhaps

the

clearest

evidence

possible

of

both

their

true

intentions

as

well

as

the

pernicious effects

of

the

conflicted

external

management

structure

at

CWH

–

No

party

whose

interests

were

truly

aligned

with

that

of

shareholders

would

have

sponsored

secret

legislation

to

eviscerate

shareholder  

rights

If

the

Portnoys

could

so

brazenly

break

a

promise

written

in

the

Company’s charter

for

28

years,

how

easy

will

it

be

to

break

promises

made

a

mere

3

months ago?

Nothing stops the Portnoys and RMR from sponsoring a new legislative

“clarification”

in 2015

Appendices

Appendix

A:

CWH

Prospectus

Supplement,

Dated

February

27,

2013

Appendix

B:

CWH

S-3

Registration

Statement,

Dated

April

7,

2004

Appendix

C:

Letter

From

RMR

To

Maryland

Senate

Judicial

Proceedings

Committee

10

11

Appendix

A:

CWH

Prospectus

Supplement

Dated

February

27,

2013

12

Appendix

B:

CWH

S-3

Registration

Statement

Dated

April

7,

2004

13

Appendix

C:

Letter

From

RMR

To

Maryland

Senate

Judicial

Proceedings

Committee

14

Appendix

C:

Letter

From

RMR

To

Maryland

Senate

Judicial

Proceedings

Committee

15

Appendix

C:

Letter

From

RMR

To

Maryland

Senate

Judicial

Proceedings

Committee

Additional

Information

Regarding

The

Corvex/Related

Solicitation

16

Corvex

Management

LP

and

Related

Fund

Management,

LLC

have

filed

a

definitive

solicitation

statement

with

the

Securities

and

Exchange

Commission

(the

“SEC”)

to

(1)

solicit

consents

to

remove

the

entire

board

of

trustees

of

CommonWealth

REIT

(the

“Removal

Proposal”),

and

(2)

elect

a

slate

of

new

trustees

at

a

special

meeting

of

shareholders

that

must

be

promptly

called

in

the

event

that

the

Removal

Proposal

is

successful.

Investors

and

security

holders

are

urged

to

read

the

definitive

solicitation

statement

and

other

relevant

documents

because

they

contain

important

information

regarding

the

solicitation.

The

definitive

solicitation

statement

and

all

other

relevant

documents

are

available,

free

of

charge,

on

the

SEC’s

website

at

www.sec.gov.

The

following

persons

are

participants

in

connection

with

the

solicitation

of

CommonWealth

REIT

shareholders:

Corvex

Management

LP,

Keith

Meister,

Related

Fund

Management,

LLC,

Related

Real

Estate

Recovery

Fund

GP-A,

LLC,

Related

Real

Estate

Recovery

Fund

GP,

L.P.,

Related

Real

Estate

Recovery

Fund,

L.P.,

RRERF

Acquisition,

LLC,

Jeff

T.

Blau,

Richard

O’Toole,

David

R.

Johnson,

James

Corl,

Edward

Glickman,

Peter

Linneman,

Jim

Lozier,

Kenneth

Shea,

EGI-CW

Holdings,

L.L.C.,

David

Helfand

and

Samuel

Zell.

Information

regarding

the

participants

in

the

solicitation

and

a

description

of

their

direct

and

indirect

interests,

by

security

holdings

or

otherwise,

to

the

extent

applicable,

is

available

in

the

definitive

solicitation

statement

filed

with

the

SEC

on

January

28,

2014

and

Supplement

No.

1

thereto

filed

on

February

13,

2014.