SHAREHOLDER ALERT: Pomerantz Law Firm Announces the Filing of a Class Action against HCP, Inc. and Certain Officers – HCP
July 07 2016 - 7:05PM
Pomerantz LLP announces that a class action lawsuit has been filed
against HCP, Inc. (“HCP” or the “Company”) (NYSE:HCP), and certain
of the Company’s officers. The class action, filed in
United States District Court, Central District of California, and
docketed under 16-cv-04981, is on behalf of a class consisting of
all persons other than Defendants who purchased or acquired HCP
securities between March 30, 2015 and February 8, 2016, both dates
inclusive (the “Class Period”), seeking to recover damages caused
by Defendants’ violations of the federal securities laws and to
pursue remedies under Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5
promulgated thereunder.
If you are a shareholder who purchased or
otherwise acquired HCP securities during the Class Period, you have
until July 11, 2016 to ask the Court to appoint you as Lead
Plaintiff for the class. A copy of the Complaint can be
obtained at www.pomerantzlaw.com. To discuss this action,
contact Robert S. Willoughby at rswilloughby@pomlaw.com or
888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who
inquire by e-mail are encouraged to include their mailing address,
telephone number, and number of shares purchased.
[Click here to join this class
action]
HCP is a real estate investment trust (“REIT”)
focused on the healthcare industry. During the Class Period,
HCP was highly dependent upon the operations of ManorCare, Inc., a
nursing home operator, which served as HCP’s most significant
client. Indeed, HCP routinely referred to ManorCare as its
“partner” in its communications to investors. HCP invested
directly in ManorCare, purchasing substantially all of ManorCare’s
real estate facilities (which were then leased back to ManorCare)
and taking a 10% equity stake in ManorCare.
The Complaint alleges that throughout the Class
Period, defendants made materially false and/or misleading
statements regarding the Company’s business, operational and
compliance policies. Specifically, defendants made false
and/or misleading statements and/or failed to disclose that:
(a) ManorCare was actively engaged in reimbursement billing
fraud, in violation of federal and state laws; (b) as a result of
ManorCare’s billing fraud, ManorCare’s reported revenue and
earnings were false and ManorCare’s consolidated financial
statements did not comply with GAAP; and (c) ManorCare’s billing
fraud and the U.S. Department of Justice’s (“DOJ”) action against
ManorCare put HCP’s lease revenue stream from ManorCare in
jeopardy, and called into question the value of HCP’s ManorCare
real estate assets and HCP’s equity stake in ManorCare. As a result
of Defendants’ false statements and fraudulent course of conduct,
HCP’s stock traded at artificially inflated prices during the Class
Period.
On April 21, 2015, HCP disclosed that the DOJ
had intervened in the whistleblower lawsuits and filed a
consolidated complaint. In connection with the DOJ’s intervention,
the DOJ and whistleblower complaints were unsealed, and those
allegations were made public for the first time. HCP’s stock
declined by 1.1% in response to these disclosures. Defendants,
however, continued to conceal from investors the full truth by
downplaying the DOJ’s actions, and denying the truth of the DOJ’s
claims against ManorCare.
On May 5, 2015, HCP disclosed that it had
recorded a non-cash impairment charge of $478 million related to
certain of its lease arrangements with ManorCare, and stated that
this impairment reduced the carrying value of HCP’s ManorCare
assets from $6.6 billion to $6.1 billion. HCP’s stock declined by
2.9% in response to this news. However, Defendants continued to
falsely assure investors that the DOJ’s intervention in the
whistleblower lawsuits would not impact ManorCare’s profitability,
and denied that ManorCare had engaged in any wrongdoing.
On November 3, 2015, HCP disclosed an impairment
charge of $27 million related to its 9% equity interest in
ManorCare. HCP’s stock declined by 2.6% in response to this news.
However, HCP falsely attributed the impairment to admissions
trends, and failed to disclose the rampant billing fraud and
mounting pressure from the DOJ and whistleblower lawsuits, which
put HCP’s ManorCare investments at serious risk.
Finally, on February 9, 2016, HCP disclosed that
its equity stake in ManorCare had been written down to zero, and
that it had taken an $836 million non-cash impairment on its
ManorCare lease assets and placed all of its ManorCare real estate
assets on a “Watch List.” HCP further revealed that HCP could no
longer rely on ManorCare to pay its rent, and, as a result, had
changed the way it accounted for lease revenue from ManorCare to a
“cash only” basis. HCP also disclosed skyrocketing legal costs
incurred by ManorCare in defending against the whistleblower and
DOJ lawsuits. In response to this news, HCP’s stock price declined
by 17% in one day, from a close of $33.99 on February 8, 2016 to a
close of $28.33 on February 9, 2016.
The Pomerantz Firm, with offices in New York,
Chicago, Florida, and Los Angeles, is acknowledged as one of the
premier firms in the areas of corporate, securities, and antitrust
class litigation. Founded by the late Abraham L. Pomerantz, known
as the dean of the class action bar, the Pomerantz Firm pioneered
the field of securities class actions. Today, more than 80 years
later, the Pomerantz Firm continues in the tradition he
established, fighting for the rights of the victims of securities
fraud, breaches of fiduciary duty, and corporate misconduct. The
Firm has recovered numerous multimillion-dollar damages awards on
behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
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