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SHAREHOLDER ALERT: Pomerantz Law Firm Announces the Filing of a Class Action against HCP, Inc. and Certain Officers – HCP

NEW YORK, July 07, 2016 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against HCP, Inc. (“HCP” or the “Company”) (NYSE:HCP), and certain of the Company’s officers.   The class action, filed in United States District Court, Central District of California, and docketed under 16-cv-04981, is on behalf of a class consisting of all persons other than Defendants who purchased or acquired HCP securities between March 30, 2015 and February 8, 2016, 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.

If you are a shareholder who purchased or otherwise acquired HCP securities during the Class Period, you have until July 11, 2016 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 number of shares purchased. 

[Click here to join this class action]

HCP is a real estate investment trust (“REIT”) focused on the healthcare industry.  During the Class Period, HCP was highly dependent upon the operations of ManorCare, Inc., a nursing home operator, which served as HCP’s most significant client. Indeed, HCP routinely referred to ManorCare as its “partner” in its communications to investors.  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.

The Complaint alleges that throughout the Class Period, defendants made materially false and/or misleading statements regarding the Company’s business, operational and compliance policies.  Specifically, defendants made false and/or misleading statements and/or failed to disclose that:  (a) ManorCare was actively engaged in reimbursement billing fraud, in violation of federal and state laws; (b) as a result of ManorCare’s billing fraud, ManorCare’s reported revenue and earnings were false and ManorCare’s consolidated financial statements did not comply with GAAP; and (c) ManorCare’s billing fraud and the U.S. Department of Justice’s (“DOJ”) action against ManorCare put HCP’s lease revenue stream from ManorCare in jeopardy, and called into question the value of HCP’s ManorCare real estate assets and HCP’s equity stake in ManorCare. As a result of Defendants’ false statements and fraudulent course of conduct, HCP’s stock traded at artificially inflated prices during the Class Period.

On April 21, 2015, HCP disclosed that the DOJ had intervened in the whistleblower lawsuits and filed a consolidated complaint. In connection with the DOJ’s intervention, the DOJ and whistleblower complaints were unsealed, and those allegations were made public for the first time. HCP’s stock declined by 1.1% in response to these disclosures. Defendants, however, continued to conceal from investors the full truth by downplaying the DOJ’s actions, and denying the truth of the DOJ’s claims against ManorCare.

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, and stated that this impairment reduced the carrying value of HCP’s ManorCare assets from $6.6 billion to $6.1 billion. HCP’s stock declined by 2.9% in response to this news. However, Defendants continued to falsely assure investors that the DOJ’s intervention in the whistleblower lawsuits would not impact ManorCare’s profitability, and denied that ManorCare had engaged in any wrongdoing.

On November 3, 2015, HCP disclosed an impairment charge of $27 million related to its 9% equity interest in ManorCare. HCP’s stock declined by 2.6% in response to this news. However, HCP falsely attributed the impairment to admissions trends, and failed to disclose the rampant billing fraud and mounting pressure from the DOJ and whistleblower lawsuits, which put HCP’s ManorCare investments at serious risk.

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.” HCP further revealed that HCP could no longer rely on ManorCare to pay its rent, and, as a result, had changed the way it accounted for lease revenue from ManorCare to a “cash only” basis. HCP also disclosed skyrocketing legal costs incurred by ManorCare in defending against the whistleblower and DOJ lawsuits. In response to this news, HCP’s stock price declined by 17% in one day, from a close of $33.99 on February 8, 2016 to a close of $28.33 on February 9, 2016.

The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, 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

Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com