NEW YORK, Nov. 21, 2023 (GLOBE NEWSWIRE) — Pomerantz LLP announces that a class action lawsuit has been filed against Medical Properties Trust, Inc. (“MPW” or the “Company”) (NYSE: MPW) and certain officers. The class action, filed in the United States District Court for the Southern District of New York, and docketed under 23-cv-08597, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired MPW securities between May 23, 2023 and August 17, 2023, 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 (“Exchange Act”).
If you are a shareholder who purchased or otherwise acquired Archer securities during the Class Period, you have until November 28, 2023 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 newaction@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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MPW is a self-advised real estate investment trust that was formed to acquire and develop net-leased healthcare facilities. MPW’s financing model purportedly facilitates acquisitions and recapitalizations and allows operators of hospitals to unlock the value of their real estate assets to fund facility improvements, technology upgrades, and other investments in operations.
On May 23, 2023, MPW issued a press release announcing that it had entered into a recapitalization transaction (the “Recap Transaction”) with Prospect Medical Holdings, Inc. (“Prospect”), a health care management services organization. Pursuant to the Recap Transaction, in relevant part, MPW would take an equity stake in Prospect’s managed care business, PHP Holdings, LLC (“PHP”), in lieu of a cash payment of outstanding loans and accrued but unpaid rent and interest owed by Prospect to MPW.
As a result of PHP’s involvement in the deal, the Recap Transaction was subject to regulatory approval by the Department of Managed Health Care of the Health and Human Services Agency of the State of California (“DMHC”), the regulatory body responsible for governing managed health care plans in California. On July 20, 2023, the DMHC issued an order (the “DMHC Order”) putting the Recap Transaction on hold in order to obtain further information from the Company. Despite the foregoing, MPW elected not to disclose the DMHC Order to MPW shareholders when the Company reported its Q2 2023 results on August 8, 2023 or in its quarterly report filed with the SEC on August 9, 2023. Instead, MPW continued to tout the benefits of the Recap Transaction by stating that the deal had boosted the Company’s revenue.
The truth regarding the Recap Transaction’s approval status was revealed on August 18, 2023 when the Wall Street Journal (“WSJ”) published an article entitled “Cracks Deepen for America’s Biggest Hospital Landlord: Struggling Tenants, a Bailout on Hold” (the “WSJ Article”). The WSJ, which had obtained a copy of the DMHC Order and other documents from the DMHC under California’s Public Records Act, discussed the DMHC’s decision to halt the Recap Transaction and the negative impact MPW and Prospect could each experience if the deal is permanently rejected.
That same day, MPW issued a press release responding to the WSJ Article, in which the Company downplayed the DMHC Order as a “standard, expected, and non-controversial part of the approval process for [the Recap Transaction]” and attempted to excuse the Company’s non-disclosure of the DMHC Order to shareholders by stating that the “DMHC’s request was deemed immaterial to [MPW’s] financials and thus did not require disclosure.”
Despite MPW’s attempts to reassure investors, following publication of the WSJ Article, MPW’s stock price fell $0.57 per share, or 7.6%, to close at $6.93 per share on August 18, 2023.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Recap Transaction was subject to regulatory approval and had in fact been placed on hold by the DMHC; (ii) accordingly, MPW had misrepresented the regulatory process for the Recap Transaction’s approval; (iii) as a result of the foregoing, MPW overstated the approval prospects and benefits of the Recap Transaction; and (iv) as a result, the Company’s public statements regarding the Recap Transaction were materially false and misleading at all relevant times.
On August 18, 2023, the Wall Street Journal published an article entitled “Cracks Deepen for America’s Biggest Hospital Landlord: Struggling Tenants, a Bailout on Hold”.
That same day, MPW issued a press release responding to the WSJ Article, in which the Company downplayed the DMHC Order as a “standard, expected, and non-controversial part of the approval process for [the Recap Transaction]” and attempted to excuse the Company’s non-disclosure of the DMHC Order to shareholders by stating that the “DMHC’s request was deemed immaterial to [MPW’s] financials and thus did not require disclosure.”
Despite MPW’s attempts to reassure investors, following publication of the WSJ Article, MPW’s stock price fell $0.57 per share, or 7.6%, to close at $6.93 per share on August 18, 2023.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, 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, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz 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 billions of dollars in damages awards on behalf of class members. See www.pomlaw.com.
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CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
888-476-6529 ext. 7980
