According to the law firm press release, HCP, Inc. is a real estate investment trust focused on the healthcare industry. Throughout the Class Period, HCP was highly dependent upon the operations of ManorCare, a nursing home operator, which served as HCP's most significant client.

Prior to the start of the Class Period, HCP 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.

The Complaint alleges throughout the Class Period, Defendants misrepresented ManorCare's financial performance, the value of HCP's ManorCare assets, and 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 misrepresentations, HCP common stock traded at artificially inflated prices during the Class Period.

In truth, Defendants knew or recklessly disregarded that ManorCare was engaged in rampant billing fraud, which allegedly generated false claims for "reimbursement" submitted to government programs. ManorCare's billing fraud was the subject of multiple whistleblower lawsuits, and an investigation by the United States Department of Justice ("DOJ").

On April 21, 2015, HCP disclosed that the DOJ had intervened in the whistleblower lawsuits and 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."

On November 28, 2017, the Court issued an Order appointing Lead Plaintiffs and Counsel. Lead Plaintiffs filed a consolidated Complaint on February 28, 2018. On March 30, Defendants filed Motions to Dismiss the consolidated Complaint. On December 3, Lead Plaintiffs voluntarily dismissed three of the Defendants. On November 22, 2019, the Court issued an Order granting Defendants' Motion to Dismiss the consolidated Complaint for failure to state a claim.