SAN DIEGO–(BUSINESS WIRE)–Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) today announced that a class action has been commenced on behalf of holders of FelCor Lodging Trust Incorporated (“FelCor”) (NYSE:FCH) common stock on July 6, 2017. This action was filed in the Northern District of Texas and is captioned Bagheri v. FelCor Lodging Trust Incorporated, et al., No. 17-cv-1892.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges FelCor, the members of its Board of Directors (the “Board”), FelCor Lodging Limited Partnership, RLJ Lodging Trust (“RLJ”), RLJ Lodging Trust, L.P., Rangers Sub I, LLC and Rangers Sub II, LP (collectively, “defendants”) with violations of the Securities Exchange Act of 1934 (“1934 Act”) in connection with the proposed acquisition of FelCor by RLJ. FelCor is a Maryland real estate investment trust that owns a diversified portfolio of primarily upscale and luxury hotels located in major markets and resort locations throughout the United States.
On April 24, 2017, FelCor and RLJ issued a joint press release announcing they had entered into a definitive merger agreement pursuant to which RLJ will acquire FelCor, and FelCor shareholders will receive 0.362 shares of RLJ common stock for each share of FelCor common stock they own, which, based on RLJ’s stock price on April 21, 2017, the last trading day before defendants announced the Proposed Transaction, represented a value to FelCor shareholders of only $8.40 per share (the “Merger Consideration”). However, since the value of the Merger Consideration is tied to the value of RLJ’s stock and defendants failed to negotiate and secure a “collar” in favor of FelCor’s shareholders, the value implied by the Merger Consideration has decreased, and as of July 5, 2017, the Merger Consideration represented a value of only $7.20 per share. The complaint alleges the Merger Consideration significantly undervalues FelCor, as it fails to account for the Company’s intrinsic value and projected growth potential.
In addition, the complaint alleges that on June 2, 2017, defendants filed with the SEC a joint proxy statement/prospectus and registration statement on Form S-4 (the “Joint Proxy”) to solicit shareholder approval of the Proposed Transaction that omits material information regarding the Proposed Transaction, which renders the statements in the Joint Proxy materially false and misleading in violation of §14(a) of the 1934 Act. According to the complaint, the Joint Proxy omits material information regarding management’s financial projections for FelCor, which were provided to and relied upon by the Board’s financial advisor to support its fairness opinion. If disclosed, the omitted information would significantly alter the total mix of information available to FelCor shareholders in making their decision on whether to approve the Proposed Transaction.
Finally, the complaint alleges that the Board, RLJ and its affiliated entities had the ability to exercise control over, and did control, a person or entity that violated §14(a) of the 1934 Act. As such, the Board, RLJ and its affiliated entities violated §20(a) of the 1934 Act.
Plaintiff seeks injunctive relief and/or compensatory damages on behalf of all shareholders of FelCor as of July 6, 2017 (the “Class”). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is widely recognized as a leading law firm advising and representing U.S. and international investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For the third consecutive year, the Firm ranked first in both the total amount recovered for investors and the number of shareholder class action recoveries in ISS’s SCAS Top 50 Report. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm’s clients. Robbins Geller not only secures recoveries for defrauded investors, it also implements significant corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.