Bernstein Liebhard LLP Announces That a Class Action Has Been Filed Against CommonWealth REIT
NEW YORK, Jan. 3, 2013 /PRNewswire/ -- Bernstein Liebhard LLP today announced that a class action has been commenced in the United States District Court for the District of Massachusetts on behalf of a class (the "Class") of purchasers of CommonWealth REIT ("CommonWealth" or the "Company") (NYSE: CWH) common shares between January 10, 2012 and August 8, 2012 (the "Class Period").
The complaint charges CommonWealth and certain of its officers and directors with violations of the Securities Exchange Act of 1934. CommonWealth is a real estate investment trust, or REIT, which primarily owns office and industrial properties located throughout the United States.
The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company's financial performance and future prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (a) that the Company was experiencing softness in the leasing market as the number of leased office spaces, especially in the Company's suburban office segment, was below internal expectations; (b) that existing tenants were demanding and receiving significant concessions, which was further eroding the Company's rental income; and (c) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company's leverage ratio, occupancy rate and dividend payout.
On August 8, 2012, the Company announced its financial results for the second quarter of 2012, the period ended June 30, 2012. Following the earnings press release, CommonWealth held a conference call with analysts and investors. During the conference call, defendant Adam D. Portnoy, the Company's President and Managing Trustee, stated that CommonWealth would likely reduce its dividend because, among other things, the Company's cash available for distribution payout ratio had increased to 108%. Moreover, the Company revealed that its occupancy rate fell to 84.5%, as of June 30, compared to 84.8% on March 31. In reaction to these announcements, the price of CommonWealth common shares fell $1.57 per share, or 9%, to close at $16.48 per share. The price of the Company's shares continued to decline over the next two trading days to $15.67 per share as the market digested this news.
On October 9, 2012, CommonWealth announced its quarterly common and preferred dividends. In that regard, defendants announced a common dividend of $0.25 per common share – a 50% reduction from the Company's previous dividend rate.
Plaintiffs seek to recover damages on behalf of all Class members who invested in CommonWealth common shares during the Class Period. If you invested in CommonWealth common shares as described above during the Class Period, and either lost money on the transaction or still hold the shares, you may wish to join in this action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than February 25, 2013.
A "lead plaintiff" is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard LLP, or other counsel of your choice, to serve as your counsel in this action.
If you are interested in discussing your rights as a CommonWealth shareholder and/or have information relating to the matter, please contact Joseph R. Seidman, Jr. at (877) 779-1414 or firstname.lastname@example.org.
Bernstein Liebhard LLP has pursued hundreds of securities, consumer and shareholder rights cases and recovered over $3 billion for its clients. It has been named to The National Law Journal's "Plaintiffs' Hot List" in each of the last ten years.
You can obtain a copy of the complaint from the clerk of the court for the United States District Court for the District of Massachusetts.
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SOURCE Bernstein Liebhard LLP