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Berger & Montague Files Case on Behalf of Disenfranchised Commonwealth REIT Shareholders

Posted: June 11, 2013
By: Lawrence Deutsch
Practice Areas: Corporate Governance & Shareholder Rights, Securities Litigation

PHILADELPHIA, PA, June 11, 2013 - The law firm of Berger & Montague, P.C. with co-counsel have filed a Class Action and Derivative Complaint on behalf of the shareholders of Commonwealth REIT (CWH) [Central Laborers' Pension Fund v. Portnoy, No. 24-c-13-1966 (Md. Cir. Ct.). ]

The Complaint alleges numerous violations by the Commonwealth REIT Trustees of their fiduciary duties, including that the Trustee Defendants: (a) refused to set a date for a consent solicitation by investors who offered to buy CWH's common shares at a 58% premium to the market price; (b) improperly amended the Company's bylaws to insulate themselves from removal; (c) conducted a highly dilutive offering that was devoid of any legitimate business purpose (d) invoked the Company's debt provisions for the inequitable purpose of undermining the CWH shareholders' interests in voting control; (e) attempted to change Maryland law so that the incumbent director could only be removed with cause; and (f) disseminated false and misleading statements regarding CWH shareholders' right to remove Trustees without cause.

The Trustee Defendants filed a petition to arbitrate all shareholder claims. On June 10, 2013, Berger & Montague with co-counsel filed Plaintiffs' opposition to arbitration that includes affidavits from many of the most prominent securities and corporate governance experts, who argue that granting Defendants' petition might negatively affect capital markets by suggesting that a Board could immunize itself from egregious corporate governance violations.

A copy of the Second Amended Complaint (the current complaint) can be found here.

For more information about this case, please contact:

Lawrence Deutsch, Esq.


1622 Locust Street

Philadelphia, PA 19103

Telephone: (215) 875-3062