Wells Real Estate Investment Trust Securities Litigation
Practice:
Securities Fraud & Shareholder Litigation
Phase:
Current Chimicles & Tikellis LLP filed two class action lawsuits on behalf of shareholders of Wells Real Estate Investment Trust, Inc., now known as Piedmont Office Realty Trust:
- March 2007 Class Action Lawsuit concerning the Merger of the Company’s Advisor into the REIT: Washtenaw County Employees’ Retirement System v. Wells Real Estate Investment Trust, Inc., et. al., Case 1:07-cv-00862 (USDC ND Georgia).
- October 2007 Class Action Lawsuit concerning the Tender Offers made to shareholders in 2007 and the Company’s securing shareholder approval to extend the deadline by which the Company was to list its stock or liquidate: Washtenaw County Employees’ Retirement System v. Piedmont Office Realty Trust, Inc., et al., Case 1:07-cv-02660 (USDC ND Georgia).
Please visit both web pages on Chimicles & Tikellis LLP’s website to get complete information about the status of each pending lawsuit.
Washtenaw County ERS v. Wells Real Estate Investment Trust, Inc.·
Notice of Pendency of Class Action dated September 23, 2011
Court Orders:
- August 2, 2010 -- Granting Plaintiff's Motion for Summary Judgment in Part and Denying Defendants' Motion for Summary Judgment in Full
- September 16, 2009—Granting Plaintiff’s Motion for Class Certification and Appointing Class Counsel (see attached pdf below)
- May 9, 2008 - Clarification of March 31, 2008 Order (see attached pdf below)
- March 31, 2008 Order - Denying in Part and Granting in Part Defendant's Motion to Dismiss (see attached pdf below)
Complaints:
- Second Amended Complaint filed on April 21, 2008 (see attached pdf below)
- Amended Complaint filed on June 27, 2007 (see attached pdf below)
- Complaint (see attached pdf below)
Press Releases:
- April 27, 2008: Wells Litigation Transferred to Federal Court in Georgia (see attached pdf below)
- March 13, 2008: Press Release on Commencement of Action (see attached pdf below)
Other:
- Information on Non-Listed REITS (see attached pdf below)
Chimicles & Tikellis LLP serves as Class Counsel in this certified class action brought in 2007 in the United States District Court for the Northern District of Georgia (Case 1:07-cv-00862-CAP), alleging violations of the federal securities laws by Wells Real Estate Investment Trust, Inc. ("Wells REIT" or "Company") and certain of its affiliates, officers and directors, for their failure to disclose material information in connection with Proxy materials filed with the SEC and disseminated to shareholders in February 2007, seeking their approval to merge Wells REIT’s affiliated Advisor into Wells REIT for $175 million worth of the Company’s stock.
On September 16, 2009, Judge Pannell of the Northern District of Georgia entered an Order certifying a class consisting of all shareholders of Wells REIT who were entitled to vote on the proposals in Wells REIT’s Schedule 14A Proxy Statement that was filed with the SEC on February 26, 2007. In addition, Judge Pannell appointed Chimicles & Tikellis LLP to serve as Class Counsel.
Chimicles & Tikellis successfully defended a motion to dismiss all of the claims alleged in the Amended Complaint filed on June 27, 2007. On March 31, 2008, the Court entered an Order dismissing certain of the claims, but held that Plaintiff had stated a viable claim under Section 14(a) of the Exchange Act with respect to Defendants’ failure to disclose material information in connection with the Proxy materials disseminated to shareholders that sought their vote on and approval of the Internalization Transaction. At pp. 11-12 of its March 31, Order (see attached pdf below), as clarified by its May 9, 2008 Clarification Order, the Court considered the allegations of the Amended Complaint with respect to whether certain buyout offers to the Company made by Lexington Realty Trust in letters dated March 5, 2007 and April 5, 2007 (“Lexington Offers”), were material facts that should have been disclosed in the Proxy or a supplement thereto. As alleged in the Amended Complaint, the March 5, 2007 Offer stated that Lexington would acquire all of the outstanding shares of Wells REIT for $9.25 per share if the Internalization did not occur and $8.90 per share if the Internalization did occur, and Lexington increased that offer to $9.45 and $9.07 per share, respectively, in its April 5, 2007 Offer.
On April 21, 2008, Chimicles & Tikellis LLP and its co-counsel filed the Second Amended Complaint in the United States District Court for the Northern District of Georgia. In conformity with the Court’s March 31, Order, the principal focus of the Scond Amended Complaint is the materially false and misleading Proxy in light of the non-disclosure of the Lexington Offers. The Second Amended Complaint, which seeks damages and other appropriate relief for the Class, charges defendants with violations of the federal securities laws, including Sections 14(a) and 20 of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder.
This Second Amended Complaint seeks to remedy the wrongdoing that was, and continues to be, inflicted against the shareholders of Wells REIT who were asked to approve the wrongful self-dealing Internalization whereby directors and officers of Wells REIT improperly garnered millions in excessive and unjustifiable consideration. The Second Amended Complaint includes allegations that:
- At the time the Proxy was disseminated and prior to the shareholders’ vote on the Proxy, Defendants knew and did not disclose the Lexington Offers to purchase all of the outstanding shares of Wells REIT stock at a per share price that would be materially reduced if the Internalization occurred. These offers were at a price that exceeded the stock price employed by Defendants for computing the number of shares they conveyed to certain Individual Defendants in effecting the Internalization and calculating the Internalization Consideration.
- Defendants’ conduct in pursuing this self-dealing Internalization transaction demonstrates that all Defendants had only one, predetermined objective which was to consummate the Internalization, even at the expense of the shareholders’ best interests and in contravention of the Defendants’ legal duties.
The parties engaged in fact discovery in spring 2009 and expert discovery in summer 2009. In December 2009, the parties filed motions for summary judgment. On August 2, 2010, the Court granted Plaintiffs' motion for summary judgment in part, and simultaneously denied Defendants' motion for summary judgment in full. A copy of the Court's order is available below.
On or around October 7, 2011, the Notice of Pendency of Class Action was sent to members of the Class (Wells REIT shareholders who were entitled to vote on the proposals contained in Wells REIT’s February 28, 2007 Proxy statement). The Notice can be viewed below. If you have any questions about the Notice, your rights or the litigation, please contact Kimberly Donaldson Smith at 610-642-8500 or by email at kimdonaldsonsmith@chimicles.com. The Court has ordered the Trial of this Action to begin on March 19, 2012.
You may also contact the Notice Administrator at 1-800-379-6239 Toll Free, or Visit www.wells.hrsclaims.com, for additional information.
If you wish to discuss this Action further, have any questions concerning this notice or your rights or interests, or need additional information on this Action please contact:
Attorneys to Contact:
Nicholas E. Chimicles (Nick@chimicles.com)
Kimberly Donaldson Smith (KimDonaldsonSmith@chimicles.com)
361 West Lancaster Avenue, Haverford, PA 19041 Phone: 610-642-8500