Kehoe Law Firm, specializing in shareholder rights litigation, jointly filed a shareholder derivative action in the U.S. District Court for the District of Maryland against certain officers and directors of Medical Properties Trust Inc. (“Medical Properties”). The complaint seeks to remedy alleged wrongdoing from July 15, 2019, to January 5, 2024.
Medical Properties previously acquired numerous hospitals and behavioral health facilities, including fourteen acute care hospitals and two behavioral health facilities owned by Prospect Medical Holdings, Inc. The complaint alleges that Medical Properties failed to properly disclose the underperformance of this asset portfolio, misleading investors about the true financial health of its medical provider tenants.
The truth began to surface on January 26, 2023, with the release of a report by Viceroy Research LLC, alleging that Medical Properties had engaged in billions of dollars of uncommercial transactions with its tenants and their management teams, purportedly to mask a revenue round-robin scheme, creating an illusion of positive payment histories for distressed tenants and thereby avoid impairment charges.
On February 23, 2023, Medical Properties disclosed a $283 million impairment charge related to its assets. Subsequently, on January 4, 2024, the company revealed further alleged breaches of fiduciary duties, including approximately $50 million in unpaid rent owed by its largest tenant.
As a result of these revelations, the price per share of Medical Properties’ common stock experienced significant declines, causing substantial harm to shareholders. The complaint also alleges that five of the Individual Defendants engaged in lucrative insider trading, selling over $58 million worth of common stock while the stock price was alleged to have been artificially inflated.
For more information about Kehoe Law Firm and its involvement in this matter, please contact Michael Yarnoff at [email protected] or call (215) 792-6676.