Lawsuit claims HCP, ManorCare misled investors
HCP ignored billing fraud and misled investors about the performance of ManorCare, its skilled nursing portfolio, according to a class action lawsuit filed against the real estate giant earlier this month.
The lawsuit, filed by a firefighter pension assets manager on May 9, alleges that HCP misled investors about ManorCare's financial performance and told investors that the portfolio's revenue stream was “secure.” The investors were told that ManorCare had a “long history of compliance with regulations,” and had billing practices that were “to the standard one would want,” the lawsuit claims.
Those assurances came at a time when ManorCare was aware of the more than $6 billion in false claims billed by the company, Legal NewsLine reported. That billing fraud resulted in a series of whistleblower allegations against the provider, consolidated into one suit by the Department of Justice last year. News of the fraud resulted in a decline of HCP stock, which subsequently hurt investors, the suit claims.
The lawsuit, filed in the U.S. District Court for the Northern District of Ohio Western Division, seeks a jury trial, compensatory damages, interests, equitable and injunctive relief, and other costs for the benefits manager and “all others similarly situated.”
The lawsuit was filed the same day that HCP announced it would be redistributing the troubled ManorCare into an independent real estate investment trust called SpinCo.