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Brixmor Property Group

Case Details

Class Period: February 20, 2014 - February 5, 2016
Date Filed: March 31, 2016
Case Number: 16-cv-2400
Jurisdiction: Southern District of New York

Case Summary

The Complaint brought forth claims for violations of the Securities Exchange Act of 1934 against Brixmor Property Group, Inc. (“Brixmor” or the “Company”), and certain of its senior executives.  The Complaint alleged that Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects on behalf of all persons or entities that purchased or otherwise acquired Brixmor securities during the Class Period.

Brixmor is a real estate investment trust (“REIT”) that operates a wholly-owned portfolio of shopping centers across the country. While traditional companies are primarily valued using earnings per share or book values pursuant to Generally Accepted Accounting Principles, REITs such as Brixmor are analyzed by examining alternative performance metrics that are of specific importance to the real estate industry. Net operating income (“NOI”)—referred to as “the single most important measurement in commercial real estate”—is the sum of money remaining after operating expenses have been deducted from a property’s rental income. Same property NOI measures NOI on a static number of properties to give insight as to how a portfolio of retail assets, such as Brixmor’s,performs over a period of time. NOI is crucial because, as an evaluation of a portfolio’s profitability, it impacts property market values, financing costs and a host of other holding period decisions. For these reasons, a former Brixmor employee characterized NOI as “the driver” and “the gauge of the company.”

Specifically, the Complaint alleged that Defendants made false and/or misleading statements and/or failed to disclose that the Company and its senior executives deliberately falsified Brixmor’s quarterly same property NOI, this extremely important publicly-reported financial metrics, falsely portraying the growth in that metric as consistent and stable when in reality it was volatile.

On November 29, 2016, the Court appointed Westchester Putnam Counties Heavy & Highway Laborers Local 60 Benefit Funds, Teamsters Local 456 Annuity Fund, and the City of Birmingham Retirement and Relief System as Lead Plaintiffs, and Saxena White P.A. as Lead Counsel.

Lead Plaintiffs filed an Amended Complaint on February 16, 2017. In May 2017, the parties reached an agreement to settle the Action for a cash payment of $28 million for the benefit of the Settlement Class. After conducting confirmatory discovery, on July 28, 2017, Lead Plaintiffs filed an unopposed motion to the Court for preliminary approval of the parties’ Stipulation of Settlement. On July 31, 2017, the Court granted preliminary approval of the Settlement.

The Court conducted a fairness hearing on December 6, 2017. On December 13, 2017, the Court issued its Judgment Approving Class Action Settlement and found that the Settlement was fair, adequate and reasonable.