Cohen Milstein Sellers & Toll PLLC is conducting an investigation to determine whether Assisted Living Concepts, Inc. (“ALC” or the “Company”) and certain of its officers and directors made false and misleading statements and/or omissions in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
A class action lawsuit was filed in the U.S. District Court for the Eastern District of Wisconsin by another law firm on behalf of purchasers of the common stock of Assisted Living Concepts, Inc. (NYSE: ALC) between March 12, 2011 and August 6, 2012, inclusive (the “Class Period”).
The complaint alleges that ALC and certain of its officers and directors (“Defendants”) misrepresented and/or failed to disclose that: (1) ALC was not in compliance with occupancy and operating covenants under its lease agreement with Ventas Realty, Limited Partnership, an entity from which it leased a number of assisted and independent living facilities; (2) Defendants violated the minimum occupancy requirement for those facilities and concealed that fact by treating units leased to employees as bona fide rentals to third parties; and (3) as a result, Defendants overstated ALC’s rental rates.
On May 4, 2012, ALC disclosed litigation with Ventas for the first time, reporting that Ventas had alleged breaches of their lease agreement. ALC further reported that its board of directors had begun an investigation into “possible irregularities in connection with” the Ventas lease agreement.
On August 7, the Company disclosed that the SEC had begun an investigation and had issued a subpoena requiring ALC to produce documents “on a number of topics, including, among others, compliance with occupancy covenants in the now-superseded lease with Ventas Realty, Limited Partnership and leasing of units for employee use.” The price of ALC shares fell from $10.77 to $7.89 on August 7.
Cohen Milstein encourages all investors who purchased ALC common stock between March 12, 2011 and August 6, 2012 or former employees with information concerning this matter to contact the firm.