HCP Inc. (NYSE: HCP)
A class action lawsuit has been filed in the United States District Court for the Northern District of Ohio on behalf of purchasers of HCP Inc. (NYSE: HCP) common stock during the period between March 30, 2015 to February 8, 2016, inclusive (the “Class Period”).
Prior to the start of the Class Period, HCP had 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. As a result of that transaction, ManorCare had a significant impact on several aspects of HCP's operations and was highly important to HCP investors. Throughout the Class Period, defendants made positive statements regarding ManorCare's financial performance and the value of HCP's ManorCare assets, and stated that HCP's revenue stream from ManorCare leases was secure. Moreover, 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." As a result of these false statements and omissions, HCP common stock traded at artificially inflated prices during the Class Period, reaching over $42 per share.
The complaint alleges, however, that contrary to defendants’ Class Period statements, ManorCare was the subject of multiple whistleblower lawsuits and an investigation by the United States Department of Justice ("DOJ") due to its rampant billing fraud (which allegedly generated over $6 billion in false claims for reimbursement by government programs), including submitting false claims for therapeutic services that did not meet the requisite criteria and maximizing reimbursement payments from the government by systematically forcing patients to remain in therapy for longer than necessary and subjecting them to unnecessary, unreasonable, and even harmful treatment.
On April 21, 2015, HCP disclosed that the DOJ had intervened in three whistleblower lawsuits and had filed a consolidated complaint. Then, 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. 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." As a result of this news, the price of HCP stock fell 17% in one day, falling from a close of $33.99 per share on February 8, 2016 to a close of $28.33 per share on February 9, 2016.
If you are a current shareholder and/or purchased stock between March 30, 2015 to February 8, 2016, and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.
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