A federal judge has dismissed a class-action lawsuit that claimed Healthpeak Properties (formerly HCP Inc.) ignored billing fraud and misled investors about the nursing home chain ManorCare.
District Judge Jeffrey Helmick in the U.S. District Court for the Northern District of Ohio ruled Friday that the allegations failed to establish that the California-based real estate investment trust had knowledge of any wrongdoing, Bloomberg Law reported. Helmick also stated the plaintiffs didn’t offer “any facts” to support their argument that the company knew that ManorCare’s revenues were declining.
“HCP’s heavy reliance on income from ManorCare, while perhaps a poor business strategy, is not evidence of scienter which could support [the] lead plaintiffs’ securities fraud claims,” court documents stated.
The lawsuit was originally filed in May 2016 by a firefighter pension assets manager, who argued the REIT had access to information concerning ManorCare’s billing information and therefore knew about the alleged fraudulent billing practices, the report stated.