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id: 837, Created by Stan Vick, Scout
Medical Properties Trust (MPW) Undisclosed Deal Suspension Case
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S.D. New YorkCourt
- WSJ revealed that the regulator suspended the Medical Properties and Prospect transaction in July 2023. However, MPT didn't disclose it in recent reports.
- On this news, $MPW fell 7.6% losing $340M of its shareholder value.
- Investors suspect MPT hid the transaction suspension, resulting in losses for them once the truth was revealed.
On August 18, 2023, the Wall Street Journal reported that the recapitalization transaction between Medical Properties Trust and Prospect had been halted since July 20, 2023, following an order from a regulatory agency in California.
Meanwhile, MPT did not reveal the regulatory order when announcing its Q2 results on August 8, 2023, or in the quarterly report submitted to the SEC on August 9, 2023.
On this news, $MPW fell 7.6% and lost over $340 million of its market capitalization, damaging shareholders.
- On May 23, 2023, MPT announced a transaction pursuant to which it would take an equity stake in Prospect Medical’s managed care business in lieu of cash payment by Prospect of hundreds of millions of dollars in outstanding loans, and unpaid rent and interest owed to MPT.
- On August 8, 2023, MPT stated that the proposed transaction with Prospect had reduced losses by $68 million based on the receipt of an equity stake in Prospect’s managed care business in lieu of payment of contractually owed rent and interest.
Now, investors have reasons to suspect MPT hid the transaction suspension, resulting in losses for them once the truth was revealed.
Failure to Disclose,
Shock Event Date
18 August 2023
29 September 2023
Lead Plaintiff Deadline
28 November 2023