Case Spotlight: American Realty Capital Properties, Inc. (ARCP)

COMPANYAmerican Realty Capital Properties, Inc. (ARCP)
SETTLEMENT AMOUNT$1,025,000,000 (tentative settlement)
INDUSTRYFinancial - Diversified
CLAIMSMisleading financials
RELEVANT PERIODFebruary 28, 2013 - October 29, 2014
CLAIM DEADLINEJanuary 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,[1] 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.[2]

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,[3] 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.

CLASS DEFINITION

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.

[1] Cornerstone Research, Securities Class Action Settlements, 2018 Review & Analysis.

[2] Securities Class Action Clearinghouse, Top Ten by Largest Settlement.

[3] Bruce Kelly, Settlements at old Schorsch REIT could cost shareholders $730 million (10/13/2018).

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To learn more about how FRT can help your firm maximize recoveries in shareholder class action settlements, contact us at learnmore@frtservices.com.

About FRT

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.

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.

Securities Class Action Cases: Quarterly Disbursed Claims – Q3-2019

In Q3-2019, over $918 million of settlement funds were distributed, across 18 settlements, a 65% increase from Q2-2019. For more information, contact your Financial Recovery Technologies representative or email us.

Top 5 Recently Settled Cases in Q3-2019 (in terms of settlement fund value)

  • Sunedison, Inc. ($74m)
  • Endo International, Plc. ($50m)
  • RH, Inc. ($50m)
  • Sandisk Corp. ($50m)
  • Devry Education Group, Inc. ($27.5m)

Top 5 Disbursed Cases in Q3-2019 (in terms of settlement fund value)

  • General Motors Company ($300m)
  • Clovis Oncology, Inc. ($142m)
  • Lendingclub Corporation ($125m)
  • Amgen, Inc. ($95m)
  • Manulife Ontario ($69m)

Q3-2019 Disbursed Cases

Disbursement DateCase NameClaim DeadlineSettlement Fund
7/1/20109ALLIED NEVADA GOLD CORPORATION10/14/2017$5,875,583
7/9/2019BANCORP, INC.1/13/2017$17,500,000
7/12/2019AMGEN, INC.12/23/2016$95,000,000
7/12/2019SYMBOL TECHNOLOGIES11/29/2018$15,000,000
7/15/2019TIBET PHARMACEUTICALS, INC.1/11/2016$14,000,000
7/19/2019BANCORPSOUTH, INC.8/23/2018$13,000,000
7/25/2019CLOVIS ONCOLOGY, INC.12/11/2017$142,000,000
7/29/2019GLOBAL EAGLE ENTERTAINMENT, INC.1/18/2019$1,100,000
7/31/2019GENERAL MOTORS COMPANY4/27/2016$300,000,000
8/2/2019PLATINUM AND PALLADIUM-$67,153,571
8/12/2019OPUS BANK7/10/2018$17,000,000
8/15/2019ARIAD PHARMACEUTICALS, INC.4/26/2018$3,500,000
8/23/2019NUVASIVE, INC. 10/23/2018$7,900,000
8/26/2019STRAIGHT PATH COMMUNICATIONS, INC.8/2/2018$9,450,000
8/26/2019SUNRUN, INC.3/4/2019$2,500,000
8/20/2019LENDINGCLUB CORPORATION6/25/2018$125,000,000
9/6/2019UTI WORLDWIDE, INC.12/18/2018$13,000,000

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.

Learn More

To learn more about how FRT can help your firm maximize recoveries in shareholder class action settlements, contact us at learnmore@frtservices.com.

About FRT

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.

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.

Webinar Replay: Trends in Global Shareholder Litigation: Implementing a Governance Policy

 

The Investment Association in association with Financial Recovery Technologies recently hosted a webinar on ‘Trends in Global Shareholder Litigation: Implementing a Governance Policy’.

Michael Lange, Securities Litigation Counsel at FRT, joined Guy Sears, Specialist Advisor at The Investment Association, to share insights on the operational challenges associated with global shareholder litigation. Watch the replay here.

As we continue to see the global shareholder litigation landscape grow and evolve, there are a number of risks factors that institutions should weigh before deciding whether to get active in a jurisdiction.

To help you further understand those risks associated with the foreign jurisdictions the speaker’s discussed, we have prepared a series of jurisdiction risk profiles.

Click here to watch the on-demand replay and learn how the complexities of global shareholder litigation have created practical challenges for fund fiduciaries and their advisers tasked with managing things. If you would like access to the slides, please contact your FRT Account Representative or email us a learnmore@frtservices.com.

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.

Learn More

To learn more about how FRT can help your firm maximize recoveries in shareholder class action settlements, contact us at learnmore@frtservices.com.

About FRT

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.

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.