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Colony Capital, Inc. Class Action Lawsuit

11 days left to seek lead plaintiff status

Case Summary

Company Name
Colony Capital, Inc.
Stock Symbol
CLNY
Class Period
August 9, 2019 to May 7, 2020
Motion Deadline
July 25, 2020
Court
Central District of California

The Colony Capital, Inc. class action lawsuit charges Colony Capital and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Colony Capital’s securities between August 9, 2019 and May 7, 2020 (the “Class Period”).  The Colony Capital class action lawsuit was commenced on May 26, 2020 in the Central District of California and is captioned Swartzendruber v. Colony Capital, Inc., No. 20-cv-04673.

Colony Capital is a leading global investment management firm with assets under management of $55 billion.  Colony Capital manages capital on behalf of its stockholders, as well as institutional and retail investors in private funds, and traded and non-traded real estate investment trusts.

The Colony Capital class action lawsuit alleges that defendants made false and/or misleading statements and/or failed to disclose that: (i) Colony Capital’s sale of its industrial real estate portfolio and the bifurcation of Colony Credit Real Estate Inc.’s portfolio were foreseeably likely to negatively impact Colony Capital’s financial and operating results; (ii) certain of Colony Capital’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, Colony Capital’s public statements were materially false and misleading at all relevant times.

On November 8, 2019, Colony Capital 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 [Colony Capital’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 Capital’s stock price fell nearly 9%.

Then, on May 8, 2020, Colony Capital reported that its portfolio companies had defaulted on $3.2 billion of debt secured by hotels and healthcare-related properties and that Colony Capital had received a notice of acceleration covering $780 million of the defaulted debt.  On this news, Colony Capital’s stock price fell an additional 3.81%.

The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Colony Capital securities during the Class Period to seek appointment as lead plaintiff in the Colony Capital class action lawsuit.  A lead plaintiff will act on behalf of all other class members in directing the Colony Capital class action lawsuit.  The lead plaintiff can select a law firm of its choice to litigate the Colony Capital class action lawsuit.  An investor’s ability to share in any potential future recovery of the Colony Capital class action lawsuit is not dependent upon serving as lead plaintiff.  If you wish to serve as lead plaintiff of the Colony Capital class action lawsuit or have questions concerning your rights regarding the Colony Capital class action lawsuit, please provide your information here or contact counsel, J.C. Sanchez of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at jsanchez@rgrdlaw.com.  Lead plaintiff motions for the Colony Capital class action lawsuit must be filed with the court no later than July 27, 2020.

Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation.  With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history.  For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements.  Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims.  Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide.  Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.

Class Period: August 9, 2019 - May 7, 2020
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