Colony Capital Shareholders Who Have Suffered Losses Greater Than $100K

Colony Capital Shareholders Who Have Suffered Losses Greater Than $100K

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Kehoe Law Firm, P.C. Investigating Claims On Behalf of Investors Who Purchased, Or Otherwise Acquired, Colony Capital Securities Between August 9, 2019 and May 7, 2020, Both Dates Inclusive, And Suffered Losses Greater Than $100K

Colony Capital investors should be aware that on May 26, 2020, a class action lawsuit was filed in United States District Court, Central District of California, against Colony Capital, Inc. (“Colony Capital,” “Colony” or the “Company”) (NYSE: CLNY) and certain Company executives seeking to recover damages caused by the Colony Defendants’ alleged violations of federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The class action was brought on behalf of investors who purchased, or otherwise acquired, Colony Capital securities between August 9, 2019 and May 7, 2020, both dates inclusive (the “Class Period”). 

According to the class action complaint:

Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Colony’s sale of its industrial real estate portfolio and the bifurcation of Colony Credit Real Estate’s portfolio were foreseeably likely to negatively impact Colony’s financial and operating results; (ii) certain of Colony’s remaining portfolio companies carried unsustainable levels of debt secured by hotels and healthcare-related properties and were thus at a significant risk of default; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.

On November 8, 2019, Colony announced its financial results for the third quarter of 2019. Among other results, the Company reported a GAAP net loss of $555 million, or $1.15 per share, which ‘notably included reductions of goodwill, real estate and provision for loan losses totaling $540.3 million . . . of which $387.0 million was attributable to the reduction of goodwill primarily as a result of the pending sale of the Company’s industrial investment management business and related real estate portfolio, and the decrease in management fees from Colony Credit Real Estate, Inc. resulting from impairments related to its portfolio bifurcation.’

On this news, Colony’s stock price fell $0.48 per share, or 8.76%, to close at $5.00 per share on November 8, 2019.

Then, on May 8, 2020, Colony issued a press release announcing its financial and operating results for the first quarter of 2020. In the press release, Colony reported that its portfolio companies had defaulted on $3.2 billion of debt secured by hotels and healthcare-related properties and that Colony had received a notice of acceleration covering $780 million of the defaulted debt.

On this news, Colony’s stock price fell $0.08 per share, or 3.81%, to close at $2.02 per share on May 8, 2020. [Emphasis added.]

Investors who purchased, or otherwise acquired, Colony Capital securities during the Class Period and suffered losses greater than $100K are encouraged to contact Kehoe Law Firm, P.C., Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], to discuss the securities investigation or potential legal claims. 

Kehoe Law Firm, P.C.