Wells Real Estate Investment Trust Securities LitigationChimicles & 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).
On September 26, 2012, the Court granted Defendants’ motion for summary judgment, and entered judgment in Defendants’ favor dismissing all claims in the Action. Subsequently, the parties reached agreements in principle to settle this Action as well as the Piedmont Action (which was also recently dismissed). The Settlements, which the court approved on April 18, 2013, result in the final disposition of both cases. Under the terms of the Settlements, Plaintiffs will release all Defendants from liability in exchange for a total cash payment by Piedmont and its insurers of $4.9 million in the Wells Action, and $2.6 million in the Piedmont Action.
In 2013, the Court granted final approval of the Settlement. A Notice, announcing the terms of the Settlements, was sent to the investors – a copy of the Notice can be found HERE. IT IS IMPORTANT that you review the Notice in its entirety.
In order to participate in any distribution of the net settlement proceeds you MUST have timely signed and returned the Claim Form.
The distributions to Eligible Claimants from the net Settlement Fund have been mailed. If you have any questions, have not received a check, or have moved and need to update your mailing address call the Claims Administrator at 800-379-6239. Any other questions, contact Kim Donaldson Smith by e-mail at or by phone at 610-642-8500.
- August 2, 2010 — Granting Plaintiff’s Motion for Summary Judgment in Part and Denying Defendants’ Motion for Summary Judgment in Full (available here)
- September 16, 2009—Granting Plaintiff’s Motion for Class Certification and Appointing Class Counsel (available here)
- May 9, 2008 – Clarification of March 31, 2008 Order (available here)
- March 31, 2008 Order – Denying in Part and Granting in Part Defendant’s Motion to Dismiss (available here)
- Second Amended Complaint filed on April 21, 2008 (available here)
- Amended Complaint filed on June 27, 2007 (available here)
- Complaint (available here)
- April 27, 2007: Wells Litigation Transferred to Federal Court in Georgia (available here)
- March 13, 2008: Press Release on Commencement of Action (available here)
- Information on Non-Listed REITS (available here)
- Washtenaw County ERS v. Wells Real Estate Investment Trust, Inc.· Notice of Pendency of Class Action dated September 23, 2011 (available here)
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 (available here), 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.
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 here. 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). Notice can be viewed here.
On September 26, 2012, the Court granted Defendants’ motion for summary judgment, and entered judgment in Defendants’ favor dismissing all claims in the Action. Subsequently, the parties reached agreements in principle to settle this Action as well as the Piedmont Action (which was also recently dismissed). The proposed settlements, which are subject to court approval following the negotiation and execution of definitive agreements and notice to the classes, will result in the final disposition of both cases. Under the terms of the proposed settlements, Plaintiffs will release all Defendants from liability in exchange for a total cash payment by Piedmont and its insurers of $4.9 million in the Wells Action, and $2.6 million in the Piedmont Action.
The parties are negotiating and documenting the terms of the proposed Settlements, a Notice announcing the proposed settlements will then be sent to the investors, and the Court must review the proposed Settlements and grant them final approval before they become effective. That process will take several months. Again, the proposed settlements are not final or effective and remain subject to court approval. We cannot estimate at this time any amount that will go to Piedmont shareholders who are members of the Classes in the settlements; the Notice that will be sent to the shareholders will contain such information.
As new information becomes available, it will be posted on this website.
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