According to the law firm press release, the complaint alleges that the offering materials provided to investors during the IPO contained material misrepresentations and omissions about the financial health of the Company and its affiliates and about the performance of earlier real estate programs sponsored by the Company’s affiliates.
On January 16, 2013, the Company revealed that it had defaulted on a $29 million loan that its CEO and Chairman had personally and unconditionally guaranteed and on its $45 million revolving credit facility. Then, on August 28, 2013, the Company issued a press release disclosing that a board-level “Special Committee” had been formed a year earlier “for the protection of shareholders” after one of the Company’s affiliates was found to be paying fees to itself that had not been earned; and that its affiliates had defaulted on certain corporate debt obligations and had sustained significant corporate losses. In the wake of this disclosure, the Company replaced its CEO and Chairman and severed its relationship with its affiliates.
On October 22, 2013, the Plaintiff filed a Notice voluntarily dismissing this case.