TOLEDO, Ohio (Legal Newsline) - A firefighter pension assets manager is suing a real estate investment trust, a nursing home operator, and several of their executive officers, alleging they misled investors.
Boynton Beach Firefighters' Pension Fund, individually and for all others similarly situated, filed a class action lawsuit May 9 in U.S. District Court for the Northern District of Ohio Western Division against HCP Inc., HCR ManorCare Inc., Lauralee Martin, Timothy Schoen, Paul A. Ormond and Steven M. Cavanaugh, alleging violations of federal securities laws.
According to the suit, ManorCare has served as HCP's most significant client.
From March 30, 2015 to Feb. 8, 2016, the lawsuit alleges, the defendants misrepresented ManorCare's financial performance and falsely assured investors that HCP's ManorCare assets and revenue stream were secure and unimpaired.
Furthermore, the complaint states, HCP and ManorCare represented that ManorCare had "a long history of compliance with regulations," and that ManorCare's billing practices had been "audited" in the past and were "to the standard one would want."
The lawsuit alleges, however, the defendants were aware of and ignored that ManorCare was engaged in billing fraud that allegedly generated more than $6 billion in false claims. On this news, HCP stock declined, damaging investors, the suit says.
The firefighters pension fund and others in the class seek a jury trial, compensatory damages, interests, equitable and injunctive relief, attorney fees and other costs of the suit. They are represented by attorneys John R. Climaco and Scott D. Simpkins of Climaco Wilcox Peca Tarantino & Garofoli in Cleveland, and Gerald H. Silk, Avi Josefson and Rebecca E. Boon of Bernstein Litowitz Berger & Grossmann LLP in New York.
U.S. District Court for the Northern District of Ohio Western Division Case number 3:16-CV-01106-JJH