Bernstein Litowitz Berger & Grossmann LLP Announces Securities Class Action Suit Filed Against HCP, Inc., HCR ManorCare, Inc., and Certain of Their Senior Executives

NEW YORK, May 10, 2016 /PRNewswire/ -- Bernstein Litowitz Berger & Grossmann LLP ("BLB&G") announces that on May 9, 2016, it filed a securities class action lawsuit on behalf of its client Boynton Beach Firefighters' Pension Fund ("Boynton Beach Fire") against HCP, Inc. ("HCP") (NYSE: HCP), HCR ManorCare, Inc. ("ManorCare"), and certain of their senior executives (collectively "Defendants").  The action, which is captioned Boynton Beach Firefighters' Pension Fund v. HCP, Inc., et al., No. 3:16-cv-01106-JJH (N.D. Ohio) asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. §§ 78j(b) and 78t(a), and SEC Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5, on behalf of investors who purchased or otherwise acquired HCP common stock during the period from March 30, 2015 through February 8, 2016, inclusive (the "Class Period").

The Complaint alleges that during the Class Period, Defendants violated provisions of the Exchange Act by issuing false and misleading press releases, financial statements, filings with the U.S. Securities and Exchange Commission ("SEC"), and statements during investor conference calls.  HCP is a real estate investment trust ("REIT") 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. 

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."

If you wish to serve as lead plaintiff for the Class, you must file a motion with the Court no later than July 11, 2016, which is the first business day on which the District Court for the Northern District of Ohio is open that is 60 days after the May 10, 2016 publication date of this notice.  Any member of the proposed class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed class.

Boynton Beach Fire is represented by BLB&G, a firm of over 100 attorneys with offices in New York, California, Louisiana, and Illinois.  If you wish to discuss this Action or have any questions concerning this notice or your rights or interests, please contact Avi Josefson of BLB&G at 212-554-1493, or via e-mail at [email protected].

Since its founding in 1983, BLB&G has built an international reputation for excellence and integrity.  Specializing in securities fraud, corporate governance, shareholders' rights, employment discrimination, and civil rights litigation, among other practice areas, BLB&G prosecutes class and private actions on behalf of institutional and individual clients worldwide. Unique among its peers, BLB&G has obtained several of the largest and most significant securities recoveries in history, recovering billions of dollars on behalf of defrauded investors. More information about BLB&G can be found online at www.blbglaw.com.

SOURCE Bernstein Litowitz Berger & Grossman LLP

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