SCHEDULE: Scully Royalty Ltd. Shareholder Group Files Amendment

A group of shareholders, including MILFAM LLC and related entities, has filed an amendment to their Schedule 13D, detailing their beneficial ownership and ongoing discussions regarding the governance of Scully Royalty Ltd.

Summary

• This filing is an amendment to a Schedule 13D, indicating a change in beneficial ownership or a new filing requirement for a group of shareholders in Scully Royalty Ltd.
• The filing details the beneficial ownership of common shares by various entities and trusts associated with Neil S. Subin, MILFAM LLC, and other related parties.
• The Reporting Group, which includes MILFAM and the Kellogg Parties, collectively beneficially owns approximately 48.5% of Scully Royalty Ltd.'s outstanding common shares.
• The filing discusses ongoing litigation initiated by Scully Royalty Ltd. against the Kellogg Parties and others, alleging the formation of an undisclosed group to gain control of the Issuer.
• The Reporting Persons deny acting as a group with other defendants during the period addressed in the Issuer's complaint, stating they decided to act as a group on a go-forward basis immediately prior to this filing.
• The Reporting Group intends to nominate directors and potentially replace current management, engaging in discussions with other shareholders and considering further actions regarding the company's governance and strategy.
• A Joint Filing Agreement dated July 31, 2026, is included as an exhibit, formalizing the agreement among the reporting persons.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing as having a neutral to slightly negative sentiment due to the ongoing litigation and governance disputes, despite the clear articulation of shareholder intentions.

Positives

• The Reporting Group collectively holds a significant stake of approximately 48.5% in Scully Royalty Ltd., indicating substantial influence.
• The formation of a joint filing agreement and the intention to act as a group suggests a coordinated strategy to influence corporate governance.
• The Reporting Group is actively engaging in discussions and considering various actions to shape the future of the company, including board composition.

Negatives

• The company has initiated litigation against key shareholders, alleging the formation of an undisclosed group and seeking an injunction.
• The previous attempt to hold an Annual General Meeting (AGM) in 2025 failed due to disputes over director nominations and meeting procedures, leading to further litigation.
• The company's directors remain in office due to the failure to appoint new directors at the 2025 AGM, indicating ongoing governance uncertainty.

Risks

• Ongoing litigation between the company and its significant shareholders creates uncertainty and potential legal costs.
• Disputes over director nominations and meeting procedures highlight potential governance conflicts and instability.
• The potential for further litigation or shareholder activism could impact the company's operations and stock price.
• The formation of a 'group' for the purpose of influencing control could lead to regulatory scrutiny and compliance challenges.

Future Outlook

The Reporting Group intends to nominate directors for election at the next annual general meeting or requisition an extraordinary general meeting to remove current directors and elect their nominees. They may also increase their ownership position and are considering the future role of Samuel Morrow. The Reporting Group may change its plans or proposals in the future.

Management Comments

• The Reporting Persons deny that they acted as a group with any of the other defendants during the period addressed in the Issuer's complaint.
• The Reporting Persons did not decide to act as a group (on a go-forward basis) with any of the other defendants named in the complaint until immediately prior to the filing of this Amendment No. 7.
• The allegations in the complaint regarding formation of a group are based 'on information and belief' and concern interactions that current Issuer management believe are 'suggestive' of group activity.
• None of the allegations in the complaint supports that a 'group' was formed for purposes of Section 13(d).
• The defendants intend to rigorously defend the lawsuit.
• The current management of the Issuer previously raised these allegations in court proceedings in the Cayman Islands, but abandoned the claims when it became clear following discovery in that litigation that the 'group' allegations lacked any merit.

Industry Context

StockSavvy.ai notes that this filing reflects a common scenario in publicly traded companies where significant shareholders seek to influence corporate governance and board composition, often leading to proxy contests or litigation. The substantial collective ownership by the Reporting Group suggests a potential shift in control or strategic direction for Scully Royalty Ltd.

Corporate Governance

Legal Proceedings

• Scully Royalty Ltd. filed a complaint in U.S. District Court for the Southern District of Florida (No. 2:26-cv-14257) against IAT Reinsurance Co. Ltd., et. al., alleging the formation of an undisclosed group to gain control of the Issuer and seeking an injunction for accurate Schedule 13D disclosures.
• MILFAM applied to the Grand Court of the Cayman Islands for a declaration that its notice nominating directors was validly delivered, which was granted.
• Further litigation occurred in the Grand Court of the Cayman Islands regarding the company directors' power to postpone the 2025 AGM, with the Court determining directors did not have the authority to postpone and that MILFAM proxyholders could not transact business.

Stakeholder Impact

• Shareholders may experience increased volatility due to ongoing governance disputes and potential proxy contests.
• Employees and management could face uncertainty regarding future leadership and strategic direction.
• Creditors and suppliers may be concerned about potential changes in company strategy or financial stability resulting from a change in control.

Next Steps

• The Reporting Group intends to nominate MILFAM Nominees for election at the next annual general meeting or requisition an extraordinary general meeting.
• The Reporting Group may engage in further discussions regarding board composition and management.
• The Reporting Group may propose or consider actions related to the business, operations, assets, governance, strategy, and future plans of the Issuer.
• The Reporting Group may enter into confidentiality or voting agreements.
• The Reporting Group may increase their ownership position in the Issuer.

Key Dates

Recommendation

The filing indicates significant shareholder activism and ongoing litigation, creating uncertainty. While the Reporting Group's substantial stake suggests potential for change, the outcome of legal battles and future strategic decisions remains unclear, warranting a hold position until more definitive information emerges.

Keywords

Scully Royalty Ltd., Schedule 13D, Beneficial Ownership, Shareholder Activism, Corporate Governance, Director Nominations, Litigation, MILFAM LLC