CBL Properties Announces Proposed Settlement of Class Action Lawsuit
March 26 2019 - 4:15PM
Business Wire
CBL Properties (NYSE: CBL) today announced that it has
approved the structure of a settlement of a class action lawsuit as
outlined below.
Background
On March 16, 2016, Wave Lengths Hair Salons of Florida, Inc.
d/b/a Salon Adrian filed a putative class action in the United
States Court for the Middle District of Florida seeking unspecified
monetary damages, as well as costs and attorneys’ fees, based on
allegations that CBL and certain affiliated entities overcharged
tenants at bulk metered malls for electricity.
In recent months, the pace of the case accelerated to a
considerable degree. On January 7, 2019, the Court partially
granted the plaintiff’s motion for class certification of a
nationwide RICO class and a Florida RICO and FDUTPA class. On
January 22, 2019, CBL filed a petition with the United States Court
of Appeals for the Eleventh Circuit seeking permission to appeal
the Court’s class certification order, and on March 4, 2019, that
petition was denied. On March 11, 2019, the Court set the trial
date for April 2, 2019. On March 15, 2019, following mediation
proceedings, a proposed structure of a settlement was approved by
representatives of the parties.
CBL denies all allegations of wrongdoing and asserts that its
actions have at all times been lawful and proper. However, given
the class certification, the accelerated trial schedule, the
inherent risk of any trial, and the potential cost of an adverse
resolution of the litigation, the Company believes that mediation
was the prudent path. Furthermore, it maintains that the proposed
settlement is in CBL’s best interest and in the best interests of
its shareholders.
Proposed Settlement Structure
Details of the proposed settlement structure and anticipated
accounting impact are available on CBL’s Form 8-K filed with the
SEC today.
As part of the proposed settlement, CBL will suspend payment of
its common dividend for two quarters: the quarter ended June 30,
2019 (payable in third quarter 2019), and the quarter ended
September 30, 2019 (payable in fourth quarter 2019). The suspension
of the dividend for two quarters will preserve approximately $26.0
million in cash at the current quarterly dividend rate. Based on
the current projection of taxable income for 2019, which includes
the impact of the settlement, CBL believes it will satisfy all
required REIT distributions for the 2019 taxable year. The proposed
settlement does not restrict CBL’s payment of common dividends
thereafter. CBL anticipates resuming a quarterly distribution with
its dividend payable in January 2020 (subject to Board approval) in
an amount to be determined at that time based on updated taxable
income projections for 2020. CBL’s common dividend previously
declared on February 25, 2019, and payable on April 16, 2019, will
be paid as declared.
About CBL Properties
Headquartered in Chattanooga, TN, CBL Properties owns and
manages a national portfolio of market-dominant properties located
in dynamic and growing communities. CBL’s portfolio is comprised of
115 properties totaling 71.5 million square feet across 26 states,
including 72 high-quality enclosed, outlet and open-air retail
centers and 11 properties managed for third parties. CBL
continuously strengthens its company and portfolio through active
management, aggressive leasing and profitable reinvestment in its
properties. For more information visit cblproperties.com.
Information included herein contains "forward-looking
statements" within the meaning of the federal securities
laws. Such statements are inherently subject to risks and
uncertainties, many of which cannot be predicted with accuracy and
some of which might not even be anticipated. Future events and
actual events, financial and otherwise, may differ materially from
the events and results discussed in the forward-looking
statements. The reader is directed to the Company’s various
filings with the Securities and Exchange Commission, including
without limitation the Company’s Annual Report on Form 10-K and the
"Management’s Discussion and Analysis of Financial Condition and
Results of Operations" included therein, for a discussion of such
risks and uncertainties.
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version on businesswire.com: https://www.businesswire.com/news/home/20190326005887/en/
Investor Contact:Katie ReinsmidtEVP & Chief Investment
Officer423.490.8301Katie.Reinsmidt@cblproperties.com
Media Contact:Stacey KeatingDirector – Public
Relations423.490.8361Stacey.Keating@cblproperties.com
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