HCP, Inc. (HCP), a real estate investment trust, Monday said it together with three of its tenants filed complaints against Sunrise Senior Living, Inc. and it subsidiaries, seeking equitable relief and money damages for breaching various contractual and fiduciary duties.
The complaints was based on Sunrise's defaults under management and related agreements covering 64 HCP-owned properties operated by Sunrise.
In the complaints filed in the Delaware Chancery Court today, HCP alleged that Sunrise and its subsidiaries operated the properties owned by it in a manner that impermissibly favored the interests of Sunrise and its affiliates at the expense of HCP and its tenants.
In addition to equitable relief and money damages relating to the defaults, HCP and its tenants also sought judicial confirmation of rights to terminate the agreements on the 64 properties.
HCP became the owner of 101 senior housing communities operated by Sunrise through its 2006 acquisition of CNL Retirement Properties, Inc. In December 2008, eleven of those communities were transferred by HCP to a new operator, shortly thereafter notifying Sunrise that it was in default of its obligations under the agreements for the remaining 90 communities.
Sunrise responded to HCP's default notices by denying that it was in violation of its agreements in any material respect. The agreements also provided Sunrise with various periods to cure the defaults, which has expired.
HCP also announced that the management agreements on 15 additional Sunrise-managed communities will be terminated effective October 1, 2009.
HCP is currently trading at $21.08, down $0.02 or 0.09%, on a volume of 2.99 million shares.
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