Securities Class Action Lawsuit Filed Against Wells Real Estate Investment Trust
A securities class action lawsuit has been filed in the United States District Court for the District of Maryland on behalf of a proposed class of the Wells Real Estate Investment Trust, Inc’s stockholders who are entitled to vote on Wells REIT’s proxy statement that was filed with the SEC on February 26, 2007.
The complaint alleges defendants with violations of the federal securities laws, including Sections 14(a) and 20 of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder.
In detail, complaint alleges that the Proxy is false, misleading and omits material information concerning the fact that: (a) the Internalization makes no economic sense to the Class and the Company given the likelihood that the Company will liquidate starting January 30, 2008; (b) they purport to sell the Advisor to the Company, but will continue to extract fees from the Company for advisory-type services; (c) recent comparable transactions reveal that the value placed on this Advisor is excessive and the Internalization transaction itself is not justified; (d) the Internalization is being used as an alternative exit strategy for the Advisor and its owners to end-run existing contractual provisions governing the Advisor’s fees and to extract fees when they otherwise could receive nothing; and (e) the so-called fairness opinion obtained by defendants to support the Internalization and the value of the Advisor is materially flawed and based on unsupported assumptions.
The Complaint also alleges that the Advisor and certain defendants owe fiduciary duties to the shareholders and the Company and breached those duties by entering into the Internalization which constitutes an abusive and self- dealing transaction, a waste of the Company’s assets and puts their own personal self-interests above those of the Company and its shareholders.
If you are a member of the proposed Class, you may, no later than May 11, 2007, apply to the United States District Court, District of Maryland, to be appointed as a Lead Plaintiff in this proposed class action. A Lead Plaintiff is a representative, chosen by the Court, who acts on behalf of other class members in directing the litigation.
Filed under Class Action, General Law
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