|COMPANY||American Realty Capital Properties, Inc. (ARCP)|
|SETTLEMENT AMOUNT||$1,025,000,000 (tentative settlement)|
|INDUSTRY||Financial - Diversified|
|RELEVANT PERIOD||February 28, 2013 - October 29, 2014|
|CLAIM DEADLINE||January 23, 2020|
The proposed settlement resolves claims that ARCP, now called VEREIT, misrepresented its financial performance for fiscal year 2013 and the first two quarters of 2014.
The settlement is noteworthy for its size. According to Cornerstone Research, since 1996, less than 2% of securities class action settlements have exceeded $1 billion. If approved, ARCP will be the tenth largest since the PSLRA was passed.
It’s also noteworthy for the amounts contributed by defendants other than the issuer. ARCP is paying $738.5M. The rest – $286.5M – is coming from AR Capital and others ($225M); ARCP’s ex-CFO ($12.5M); and ARCP’s auditors ($49M).
Finally, the settlement is noteworthy because post-class distribution, it will give a basis for comparing recovery rates to class members and opt-outs. According to InvestmentNews, last year the REIT paid $175 million to 9 institutional investors – including Vanguard – that had exited the class to pursue their own claims.
Something similar happened in last year’s mega-settlement with Petrobras ($3 billion, #5 on the top 10 list). As here, the company there settled opt-out suits before resolving the class suit. In both matters, the reduced class size likely enhanced the parties’ ability to reach resolution of the class action and given the outsized recovery, may well result in higher than average payouts to class members.
In any event, assuming the opt-out returns are significantly higher than class member recoveries, the ARCP settlement will further fuel the trend we’re seeing of large investors opting-out of high profile fraud matters.
All persons and entities that purchased or otherwise acquired the common stock, preferred stock, or debt securities of American Realty Capital Properties, Inc. or ARC Properties Operating Partnership, LP during the period between February 28, 2013 and October 29, 2014.
IMPORTANT DATES AND DEADLINES
- Final Approval Hearing; January 21, 2020
- Deadline for Objecting to Settlement: December 31, 2019
- Claim Filing Deadline: January 23, 2020
- Exclusion Deadline: If you did not exclude yourself after the Notice of Pendency of Class Action, you are a Class Member and cannot exclude yourself at this point.
 Cornerstone Research, Securities Class Action Settlements, 2018 Review & Analysis.
 Securities Class Action Clearinghouse, Top Ten by Largest Settlement.
 Bruce Kelly, Settlements at old Schorsch REIT could cost shareholders $730 million (10/13/2018).
Subscribe to FRT’s Monthly Newsletter
Financial Recovery Technologies’ Shareholder Litigation Fast Five provides you with the top news in shareholder class actions. This is your exclusive summary of the latest industry developments related to settled, group and antitrust actions and recovery opportunities. Click here to subscribe.
To learn more about how FRT can help your firm maximize recoveries in shareholder class action settlements, contact us at firstname.lastname@example.org.
- Why the Deutsche Bank Settlement is Good News for Investors in the GSE Bond Market
- FRT’s Operational Excellence: Rejected claim from administrator corrected to increase client recovery
- Case Update – Petrobras Securities Class Action (U.S. and Brazil)
- FX Case Update (August 2019): Two Settlements of Indirect Forex Suits Have Received Preliminary Approval
- Lessons Learned from the Wells Fargo RMBS Trustee Litigation
SETTLED CLAIMS I PASSIVE GROUP I ANTITRUST I FUTURE CLAIMS I OPT-IN MONITORING I OPT-OUT MONITORING
Founded in 2008, Financial Recovery Technologies (FRT) is the leading technology-based services firm that helps the investment community identify eligibility, file claims and collect funds made available in securities and other class action settlements. Offering the most comprehensive range of claim filing and monitoring services available, we provide best-in-class eligibility analysis, disbursement auditing and client reporting, and deliver the highest level of accuracy, accountability and transparency available. For more information, go to www.frtservices.com.
- Follow us on Twitter: @FRTServices
- Follow us on LinkedIn: Financial Recovery Technologies
- Email us: email@example.com
This communication and the content found by following any link herein are being provided to you by Financial Recovery Technologies (FRT) for informational purposes only and does not constitute advice. All material presented herein is believed to be reliable but FRT makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Opinions expressed in this communication may change without prior notice. Firms should always seek legal and financial advice specific to their unique situation and objectives.