NEW YORK, June 21, 2019 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against CBL & Associates Properties, Inc. (“CBL” or the “Company”) (NYSE: CBL) and certain of its officers. The class action, filed in United States District Court, for the Eastern District of Tennessee, Chattanooga Division, and indexed under 19-cv-00181, is on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired CBL securities between April 29, 2016 and March 26, 2019, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased CBL securities during the class period, you have until July 16, 2019, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here for information about joining the class action]
CBL, through its two operating subsidiaries, is organized as a real estate investment trust (“REIT”).
The Complaint alleges that the defendants made false and/or misleading statements and/or failed to disclose in CBL’s U.S. Securities and Exchange Commission filings that the Company was the target of a class action suit that could result in tens of millions or even hundreds of millions of dollars in liability. The Complaint further alleges that the defendants completely ignored their disclosure obligations, motivated by a desire to avoid negative publicity. When the truth was revealed, CBL shares materially declined in price.
On March 16, 2016, a class action suit that could result in tens of millions or even hundreds of millions of dollars in liability was filed in Florida federal court under styled of Wave Length Hair Salons of Fla., Inc. v. CBL & Assocs. Props., No. 2:16-cv-206 (M.D. Fla. Mar. 16, 2016) (the “Overbill Litigation”).
In the Overbill Litigation, the plaintiff alleged on behalf of a class of CBL retail tenants that CBL entered into leases providing that CBL would charge its tenants for electricity at cost, but instead engaged in theft by marking up the electricity bills by large amounts and pocketing the difference. The plaintiff asserted numerous causes of action, including RICO claims, which were upheld in April 2017 against a motion to dismiss. The plaintiff’s class claims, if trebled, amounted to $180 million, not counting attorneys’ fees. Although CBL defended the Overbill Ligation for years, it ultimately turned out that the Company had no true defense.
In 2019, CBL was forced to settle all claims by paying the class 100% of damages ($60 million) and paying an additional $28 million to cover its adversary’s attorneys’ fees. No insurance covered these sums, as CBL’s insurer had disclaimed coverage.
On March 1, 2019, CBL disclosed in the 2018 10-K that on January 7, 2019, class certification was granted in “a putative class action in the United States District Court for the Middle District of Florida . . . based on allegations that the Company and certain affiliated entities overcharged tenants at bulk metered malls for electricity” and that the action had been set “for the trial term starting on April 1, 2019.” CBL further advised investors that “[w]e have not recorded an accrual relating to this matter at this time as a loss has not been determined to be probable. Further, we do not have sufficient information to reasonably estimate the amount or range of reasonably possible loss at this time.”
On this news, CBL’s stock price fell $0.16 per share, or roughly 7.5%, to close at $1.98 per share on March 1, 2019.
Then, on March 26, 2019, CBL disclosed that it had settled the foregoing litigation and that the Company would be required “to set aside a common fund with a monetary and non-monetary value of $90 million”.
On this news, CBL’s stock price fell $0.47 per share, or 24.61%, to close at $1.44 per share on March 27, 2019.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com