Internal feuding at Post Properties has led Moody’s Investors Service to place the Atlanta-based apartment REIT under review for downgrade. The review was prompted by Post founder and majority shareholder John Williams’ recent efforts to forcefully replace management of the REIT.

Moody’s fears that this likely proxy fight could have a negative effect on the REITs already weak financial profile. "I believe the accelerating deterioration of the company’s performance and competitiveness shows the current board’s and management’s inability to effectively address the serious business issues facing the company," said Williams in a statement.

Post Properties vigorously opposes Williams’ plans, according to Post Chairman Robert Goddard III. The company also claims that a lawsuit previously filed by Williams against Post Properties and the board was dismissed "without prejudice."

Williams was formerly chief executive of Post, and remains a director. He owns nearly 8% of the firm’s outstanding shares. Williams’ intention is to reinstate himself as Post’s CEO until the firm’s business recovers. Until then, a weak job market combined with a strong single-family housing market has put the REIT under pressure.

Back in February 2003, Post named Goddard chairman, replacing Williams. Post Properties develops, owns and operates luxury apartment complexes in the southeastern United States. Moody’s has had a negative outlook on Post Properties since February 2002. Standard & Poor’s has also placed Post on CreditWatch. The CreditWatch placements affect $708 million of senior notes and $150 million of preferred stock. Shares of Post Properties closed down .04 cents at $25.01 on the New York Stock Exchange.