Archstone Breach of Contract, Breach of Fiduciary Duty, and Conspiracy Litigation
Court: United States District Court for the District of Colorado
Archstone Litigation — Stender v. Archstone Smith Operating Trust, et al., Case No.: 1:07-cv-02503-REB-MJW
On November 30, 2007, Wexler Wallace instituted litigation on behalf of a class of UPREIT investors (“A-1 Unitholders”) who had negotiated for securities with certain key economic characteristics, only to see those characteristics stripped away through a $22 billion merger transaction that deprived the investors of what they expected, both as a matter of contract and as minority shareholders. The complaint seeks damages against the parties to the merger, and alleges, among other things, breach of contract, breach of fiduciary duty through minority oppression, aiding and abetting the breach of fiduciary duty, inducement of a breach of contract, civil conspiracy, and unjust enrichment.
The merger involved taking the public Archstone REIT/UPREIT private by various Tishman Speyer and Lehman Brothers related entities (“Tishman-Lehman”). When negotiating the price at which they would buy out A-1 Unitholders, Tishman-Lehman lowered their offer after realizing the enormous potential liability created by tax protection agreements to which A-1 Unitholders and Archstone were parties. The merger parties then agreed to a structure intended to deprive A-1 Unitholders of the full value of their Units, offering consideration at considerably less than full value while simultaneously triggering massive taxable events for the Unitholders. All of this was done with a brazen refusal by the Defendants to comply with contractual and fiduciary obligations to A-1 Unitholders. Plaintiffs filed this class action to recover the damages inflicted by the Defendants.
The Court certified a liability class in September, 2015. Notice has been provided and parties are actively engaged in merits discovery and are proceeding towards trial.
To learn more about the case and view the amended complaint, click here.