According to the law firm press release, the complaint alleges that the Company, its former affiliates Thompson National Properties, LLC, TNP Strategic Retail Advisor, LLC and TNP Securities, LLC, and certain of the Company’s current or former officers and directors violated Sections 11, 12(a)(2) and/or 15 of the Securities Act of 1933. Among other things, 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 January 27, 2014, the Court issued an Order appointing lead plaintiff and approving lead counsel. Lead Plaintiff filed an amended complaint on March 13.
On July 29, 2014, the Court issued an Order granting in part and denying in part Defendants' motion to dismiss. The motion was denied as to the Securities Act claims.
On March 27, 2015, the parties filed a Stipulation of Settlement.