According to the lawsuit, the Complaint alleges that the proxy statement used to solicit the support of Broadmark shareholders for the Merger contained false and/or misleading statements and/or failed to disclose that:
- a material portion of borrowers within Ready Capital’s originated portfolio were experiencing significant financial distress due to high interest rates that had increased their borrowing costs;
- an oversupply of multifamily properties in Ready Capital’s markets of operation had severely limited the ability of Ready Capital borrowers to raise their rents by the amounts necessary to cover their growing debt costs;
- a major development project acquired in Ready Capital’s acquisition of Mosaic Real Estate Credit, LLC, Mosaic Real Estate Credit TE, LLC, and MREC International Incentive Split, LP (a Ritz-Carlton located in Portland, Oregon), which accounted for approximately $500 million of Ready Capital’s acquired loan portfolio, had experienced catastrophic setbacks since its inception, including significant cost overruns, construction delays, and funding shortfalls;
- as a result, Ready Capital’s Current Expected Credit Loss reserves and expected credit losses were materially understated; and
- consequently, Ready Capital’s financial projections regarding Ready Capital’s Distributable Earnings per share, dividends per share, and book value per share had no basis in fact when made.
No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice. You may also remain an absent class member and do nothing at this point. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff.
Attorney Advertising. Prior results do not guarantee a similar outcome.
