I checked this morning to see whether Piedmont has had its IPO. It has not, but a press release (and corresponding 8-K filing) touted a new $500 million line of credit the REIT has with Wachovia Bank and JP Morgan. After reading the press release I read the 8-K and it did discuss the new line of credit. The press release did not mention one item in the 8-K I thought was important - another lawsuit from an investor angry about the amount of compensation paid to Leo Wells during the REIT's management internalization. Here is an excerpt from the 8-K that discloses the new lawsuit:
Donald and Donna Goldstein, Derivatively on behalf of Nominal Defendant Wells Real Estate Investment Trust, Inc. vs Leo F. Wells, III, et al.
On August 24, 2007, a stockholder of the Registrant filed a putative shareholder derivative complaint in the Superior Court of Fulton County, State of Georgia on behalf of the Registrant against, among others, one of the Registrant’s previous advisors, Wells Capital, Inc., and a number of the Registrant’s current and former officers and directors.
The complaint alleges, among other things, (i) that the consideration paid as part of the internalization of the Registrant’s previous advisors (the “internalization transaction”) was excessive; (ii) that the defendants breached their fiduciary duties to the Registrant; and (iii) that the internalization transaction unjustly enriched the defendants.
The complaint seeks, among other things, (i) a judgment declaring that the defendants have committed breaches of their fiduciary duties and were unjustly enriched at the expense of the Registrant; (ii) monetary damages equal to the amount by which the Registrant has been damaged by the defendants; (iii) an order awarding the Registrant restitution from the defendants and ordering disgorgement of all profits and benefits obtained by the defendants from their wrongful conduct and fiduciary breaches; (iv) an order directing the defendants to respond in good faith to offers which are in the best interest of the Registrant and its shareholders and to establish a committee of independent directors or an independent third party to evaluate strategic alternatives and potential offers for the Registrant, and to take steps to maximize the Registrant’s and the
shareholders’ value; (v) an order directing the defendants to disclose all material information to the Registrant’s shareholders with respect to the internalization transaction and all offers to purchase the Registrant and to adopt and implement a procedure or process to obtain the highest possible price for the shareholders; (vi) an order rescinding, to the extent already implemented, the internalization transaction; (vii) the establishment of a constructive trust upon any benefits improperly received by the defendants as a result of their wrongful conduct; and (viii) an award to the plaintiff of costs and disbursements of the action, including reasonable attorneys’ and experts’ fees.
The REIT has had another lawsuit related to the internalization and I am not sure if this is a re-hash of that earlier suit that did not get class certification.
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