| Company: | Wells Real Estate Investment Trust, Inc. |
| Ticker Symbol: | NASD: REIT |
| Date Filed: | Mar-13-07 |
| Lead Plaintiff Deadline: | May-11-07 |
| Court: | District, MD |
| Allegations: |
A securities class action was commenced in the United States District Court for the District of Maryland against Wells Real Estate Investment Trust, Inc. ("Wells REIT" or the "Company"), and certain of its affiliates, officers and directors. Wells REIT, a real estate investment trust whose stock is not traded on a national stock exchange, is primarily engaged in the acquisition and ownership of commercial real estate properties. The Complaint was filed on behalf of a proposed class ("Class") of the Company's stockholders who are entitled to vote on Wells REIT's proxy statement that was filed with the SEC on February 26, 2007 ("Proxy"). The Complaint also includes derivative claims asserting wrongdoing on behalf of Wells REIT against certain defendants.
The Complaint, which seeks damages and other appropriate relief for the Class and the Company, charges defendants with violations of the federal securities laws, including Sections 14(a) and 20 of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder. The Proxy seeks shareholder approval to merge affiliates of the Company (the "Advisor") into Wells REIT for $175 million worth of the Company's stock ("Internalization"). The Advisor is wholly owned by officers and directors of Wells REIT and thus the Internalization is a self-dealing transaction that must receive the utmost scrutiny by the Class and the Company. The Complaint charges that the Internalization does not stand up to that scrutiny. Among other things, the Complaint alleges that the Proxy is false, misleading and omits material information concerning the fact that: (a) the Internalization makes no economic sense to the Class and the Company given the likelihood that the Company will liquidate starting January 30, 2008; (b) they purport to sell the Advisor to the Company, but will continue to extract fees from the Company for advisory-type services; (c) recent comparable transactions reveal that the value placed on this Advisor is excessive and the Internalization transaction itself is not justified; (d) the Internalization is being used as an alternative exit strategy for the Advisor and its owners to end-run existing contractual provisions governing the Advisor's fees and to extract fees when they otherwise could receive nothing; and (e) the so-called fairness opinion obtained by defendants to support the Internalization and the value of the Advisor is materially flawed and based on unsupported assumptions. The Complaint also alleges that the Advisor and certain defendants owe fiduciary duties to the shareholders and the Company and breached those duties by entering into the Internalization which constitutes an abusive and self- dealing transaction, a waste of the Company's assets and puts their own personal self-interests above those of the Company and its shareholders.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
The Complaint, which seeks damages and other appropriate relief for the Class and the Company, charges defendants with violations of the federal securities laws, including Sections 14(a) and 20 of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder. The Proxy seeks shareholder approval to merge affiliates of the Company (the "Advisor") into Wells REIT for $175 million worth of the Company's stock ("Internalization"). The Advisor is wholly owned by officers and directors of Wells REIT and thus the Internalization is a self-dealing transaction that must receive the utmost scrutiny by the Class and the Company. The Complaint charges that the Internalization does not stand up to that scrutiny. Among other things, the Complaint alleges that the Proxy is false, misleading and omits material information concerning the fact that: (a) the Internalization makes no economic sense to the Class and the Company given the likelihood that the Company will liquidate starting January 30, 2008; (b) they purport to sell the Advisor to the Company, but will continue to extract fees from the Company for advisory-type services; (c) recent comparable transactions reveal that the value placed on this Advisor is excessive and the Internalization transaction itself is not justified; (d) the Internalization is being used as an alternative exit strategy for the Advisor and its owners to end-run existing contractual provisions governing the Advisor's fees and to extract fees when they otherwise could receive nothing; and (e) the so-called fairness opinion obtained by defendants to support the Internalization and the value of the Advisor is materially flawed and based on unsupported assumptions. The Complaint also alleges that the Advisor and certain defendants owe fiduciary duties to the shareholders and the Company and breached those duties by entering into the Internalization which constitutes an abusive and self- dealing transaction, a waste of the Company's assets and puts their own personal self-interests above those of the Company and its shareholders.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
