|Company name||Colony Credit Real Estate, Inc.|
|Status||Class Action Complaint Filed|
NEW YORK, September 30, 2020 – Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed in the United States District Court for the Central District of California on behalf of investors that purchased Colony Credit Real Estate, Inc. (NYSE: CLNC) common stock pursuant and/or traceable to the Registration Statement and Prospectus (collectively, the “Registration Statement”) issued in connection with the combination of Colony NorthStar, Inc. (“Colony NorthStar”) and NorthStar Real Estate Income Trust, Inc. (“NorthStar I”) and NorthStar Real Estate Income II, Inc. (“NorthStar II”) on or about February 1, 2018 (the “Merger”). Investors have until November 9, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
The Company’s common stock was registered with the SEC in connection with the Merger. Following the Merger, Colony Credit’s common stock was listed on the New York Stock Exchange (“NYSE”) without an initial public offering: stockholders of NorthStar I received 0.3532 shares of the Company’s Class A common stock for each share of NorthStar I common stock they owned; and stockholders of NorthStar II received 0.3511 shares of the Company’s Class A common stock for each share of NorthStar II common stock they owned.
On August 8, 2019, Colony Credit issued a press release to report its second quarter 2019 financial results, in which it reported a $119 million provision for loan losses.
On this news, the Company’s share price fell $2.00 per share, or more than 12%, over two consecutive trading sessions to close at $14.05 per share on August 12, 2019.
On November 8, 2019, the Company announced a portfolio bifurcation of certain assets and disclosed a $127 million provision for loan losses.
On this news, the Company’s share price fell $2.50 per share, or nearly 18%, to close at $11.75 per share on November 8, 2019.
As of the date of the filing of this complaint, Colony Credit’s shares last closed at $5.40 per share, representing a more than 78% decline from the $25 book value per share valued at the time of the Merger.
The complaint, filed on September 10, 2020, alleges that the Registration Statement was materially false and misleading and omitted to state: (i) that the credit quality of certain of the Company’s assets had deteriorated prior to the Merger and were continuing to deteriorate at the time of the Merger; (ii) that certain of the Company’s loans, including four loans of approximately $261 million related to a New York hotel, were substantially impaired, there was insufficient collateral to secure the loans, and it was unlikely that the loans would be repaid; (iii) that, as a result, the valuation attributed to certain of the Company’s assets was overstated; (iv) that certain of the assets contributed as part of the Merger were of substantially lower value than reflected in the Company’s financial statements and the Registration Statement; (v) that, as a result, the Company’s financial condition, including its book value, was materially overstated; and (vi) that, as a result of the foregoing, the positive statements in the Registration Statement about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased Colony Credit common stock pursuant and/or traceable to the Registration Statement issued in connection with the Merger, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker, Melissa Fortunato, or Marion Passmore by email at email@example.com, or telephone at (212) 355-4648, or by filling out the contact form below. There is no cost or obligation to you.