Braemar Hotels & Resorts Inc. Announces Director Departure Amid Governance Dispute

Braemar Hotels & Resorts Inc. (NYSE: BHR) announced significant changes in its Board of Directors following a heated dispute over alleged breaches of a cooperation agreement, company governance concerns, and director resignation. The developments, disclosed in a Form 8-K filing dated February 25, 2026, are likely to capture the attention of shareholders and could have a material impact on the company’s share price.

Key Points from the Report

• Director Departure: Babak (“Bob”) Ghassemieh has resigned from the Board of Directors. The company formally notified Mr. Ghassemieh of the effectiveness of his resignation on February 20, 2026.
• Reasons for Departure: The company alleged that Mr. Ghassemieh breached the Cooperation Agreement and company policies by:
  • Violating the Code of Business Conduct and Ethics
  • Being a member of an undisclosed group as defined under Section 13(d) of the Exchange Act
  • Engaging in conduct in violation of additional sections of the Cooperation Agreement
• Ghassemieh’s Response: In a formal letter dated February 23, 2026, Mr. Ghassemieh strongly denied all allegations, stating he had complied with the Cooperation Agreement and company policies at all times. He claimed his resignation was due to concerns about the company’s governance and the conduct of its independent directors and management, rather than any wrongdoing on his part.
• Governance Concerns Raised:
  • Mr. Ghassemieh criticized the company’s governance, alleging entrenched behavior by independent directors and management, failure to manage conflicts of interest with Ashford Inc. and its affiliates, and possible retaliation against directors raising governance issues.
  • He referenced widespread shareholder activism and criticism regarding the company’s Advisory Agreement with Ashford Inc., including a \$480 million termination fee, which has been identified as a major concern by various large shareholders and activist investors over the past two years.
• Potential Legal and Shareholder Implications:
  • The company maintains that, aside from certain terminated obligations, the Cooperation Agreement remains in full force for the “Ghassemieh Signatories,” including restrictions on voting, standstill, and non-disparagement.
  • Mr. Ghassemieh alleges ongoing retaliation and an unhealthy board environment, and suggests the company and board may themselves be in breach of the Cooperation Agreement.

Issues Potentially Affecting Shareholders and Share Price

• Corporate Governance Risks: The departure of a director under contentious circumstances, especially one raising serious governance and conflict-of-interest issues, may signal deeper challenges within the company. Such events can trigger further shareholder activism, regulatory scrutiny, and volatility in share price.
• Advisory Agreement Concerns: The \$480 million termination fee associated with the company’s Advisory Agreement with Ashford Inc. (plus an additional \$25 million to affiliates) is a major point of contention. Shareholders and activists have questioned whether this arrangement is in the best interests of shareholders, and its potential renegotiation or termination could have significant financial implications.
• Continued Shareholder Activism: The fact that multiple large shareholders and activists have raised similar governance and contractual concerns suggests ongoing discontent, which may lead to further proxy contests or changes in strategic direction.
• Possible Board Instability: Mr. Ghassemieh was the only independent director with a significant investment in the company. His resignation could intensify concerns over board independence and alignment with shareholder interests.
• Potential Litigation and Regulatory Risks: The dispute references threats of litigation, possible breaches of agreements, and boardroom retaliation—all of which could result in legal costs, distractions, and regulatory investigations.

Details for Investors

• The company’s shares (BHR, BHR-PD, BHR-P) are listed on the New York Stock Exchange.
• The resignation and disputes are detailed in Exhibit 99.1 of the Form 8-K, which includes Mr. Ghassemieh’s formal response.
• The company has provided Mr. Ghassemieh the opportunity to file a further response letter, which will be made public as an amendment to the Form 8-K if submitted.

Conclusion

This unfolding governance dispute at Braemar Hotels & Resorts Inc. involves boardroom conflict, allegations of breaches of fiduciary duty, possible retaliation, and serious questions about the company’s relationships with affiliates and its overall governance structure. Investors should monitor further developments closely, as ongoing board instability, potential legal actions, and possible changes to the company’s advisory agreements could materially affect the company’s strategic direction, reputation, and share value.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should perform their own due diligence and consult professional advisors before making investment decisions. The information herein is based on public filings as of February 2026 and may be subject to updates or changes.

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