Medical Properties Trust, Inc. (NYSE: MPW) Securities Fraud Class Action

MPW investors may receive additional information about the case by clicking the link "Submit Your Information" above.  If you are a member of the class described below, you may no later than November 28, 2023 move the Court to serve as lead plaintiff of the class, if you so choose.

A class action lawsuit has been filed on behalf of those who purchased or acquired Medical Properties Trust, Inc. (“MPW”) (NYSE: MPW) securities between May 23, 2023 and August 17, 2023, both dates inclusive (the “Class Period”). 

Case Background:
On May 23, 2023, MPW issued a press release announcing that it had entered into a recapitalization transaction (the "Recap Transaction") with Prospect Medical Holdings, Inc. ("Prospect"), a health care management services organization. Pursuant to the Recap Transaction, in relevant part, MPW would take an equity stake in Prospect's managed care business, PHP Holdings, LLC ("PHP"), in lieu of a cash payment of outstanding loans and accrued but unpaid rent and interest owed by Prospect to MPW.

As a result of PHP's involvement in the deal, the Recap Transaction was subject to regulatory approval by the Department of Managed Health Care of the Health and Human Services Agency of the State of California ("DMHC"), the regulatory body responsible for governing managed health care plans in California. On July 20, 2023, the DMHC issued an order (the "DMHC Order") putting the Recap Transaction on hold in order to obtain further information from MPW. Despite the foregoing, MPW elected not to disclose the DMHC Order to MPW shareholders when the company reported its Q2 2023 results on August 8, 2023 or in its quarterly report filed with the SEC on August 9, 2023. Instead, MPW continued to tout the benefits of the Recap Transaction by stating that the deal had boosted MPW's revenue.

The truth regarding the Recap Transaction's approval status was revealed on August 18, 2023 when the Wall Street Journal ("WSJ") published an article entitled "Cracks Deepen for America's Biggest Hospital Landlord: Struggling Tenants, a Bailout on Hold" (the "WSJ Article"). The WSJ, which had obtained a copy of the DMHC Order and other documents from the DMHC under California's Public Records Act, discussed the DMHC's decision to halt the Recap Transaction and the negative impact MPW and Prospect could each experience if the deal is permanently rejected.

That same day, MPW issued a press release responding to the WSJ Article, in which the company downplayed the DMHC Order as a "standard, expected, and non-controversial part of the approval process for [the Recap Transaction]" and attempted to excuse MPW's non-disclosure of the DMHC Order to shareholders by stating that the "DMHC's request was deemed immaterial to [MPW's] financials and thus did not require disclosure."

Despite MPW's attempts to reassure investors, following publication of the WSJ Article, MPW's stock price fell $0.57 per share, or 7.6%, to close at $6.93 per share on August 18, 2023.

The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) the Recap Transaction was subject to regulatory approval and had in fact been placed on hold by the DMHC; (2) accordingly, MPW had misrepresented the regulatory process for the Recap Transaction's approval; (3) as a result of the foregoing, MPW overstated the approval prospects and benefits of the Recap Transaction; and (4) as a result, the company's public statements regarding the Recap Transaction were materially false and misleading at all relevant times.

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP:  Jonathan Naji, Esq. (484) 270-1453 or via e-mail at info@ktmc.com.  If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.