This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

CommonWealth REIT Shareholder Alleges Management Enriched Itself At Company's Expense And Seeks Damages And To Enjoin Further Self-dealing In Lawsuit Filed By Chimicles & Tikellis LLP

Public pension fund seeks damages and a court order enjoining CommonWealth REIT's management from further related-party transactions and consummating a recently-announced Equity Offering and Tender Offer; the suit was filed by Chimicles & Tikellis LLP and Shapiro Haber & Urmy LLP in Federal Court in Massachusetts

BOSTON, Feb. 28, 2013 /PRNewswire-USNewswire/ -- Chimicles & Tikellis LLP, Haverford, PA, and Shapiro Haber & Urmy LLP, Boston, MA, today announced that public pension fund Delaware County Employees Retirement Fund initiated a shareholder derivative action in federal court in Boston, Massachusetts on behalf of Massachusetts-based CommonWealth REIT ("CWH") against its co-founder Barry Portnoy and his son Adam Portnoy ("Portnoys"), and their wholly-owned entity Reit Management & Research, LLC ("RMR"), and certain other former and current officers and trustees of CWH (collectively, "Defendants").

 CWH is a public real estate investment trust ("REIT") that owns and operates office and industrial buildings and leased industrial land worth nearly $7 billion. CWH's operations are conducted by RMR, its external manager, pursuant to hefty fee-based management agreements with RMR. The Portnoys own RMR and sit on CWH's Board of Trustees ("Board"), which consists of the Portnoys' longtime friends and business associates. Through their control of the Board and RMR, the Portnoys control CWH. 

In its 65-page Complaint, Plaintiff alleges a long history of management abuse, self-dealing, and waste which resulted in various breaches of fiduciary duties owed by Defendants to CWH, including the transfer of CWH's best properties to other REITs formed and controlled by RMR for the benefit of the Portnoys. By diverting key assets, RMR (and the Portnoys) were able to borrow and raise more capital, acquire more properties and earn more management fees from the other REITs controlled by RMR.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 16,472.37 +200.36 1.23%
S&P 500 1,951.36 +27.54 1.43%
NASDAQ 4,707.7750 +80.6910 1.74%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs