Investor files class-action against Southern Park Mall operator

An Oregon investor has filed a class-action lawsuit against the company that operates the Southern Park Mall and has been in negotiations to avoid bankruptcy.
Randy Slipher, who according to court records has traded thousands of shares of Washington Prime Group, filed a complaint in U.S. District Court against the real estate investment trust, its Chief Executive Officer Louis Conforti, and Chief Financial Officer Mark Yale.
Based on SEC filings and press releases made by Washington Prime, the suit alleges that between November 5, 2020 and March 4, 2021, Washington Prime made false and/or misleading statements, as well as failed to disclose adverse facts about the Company’s business, operations, and prospects.
The complaint claims Washington Prime did not tell investors that the company’s financial condition was deteriorating, causing uncertainty about the ability to meet its financial obligations as they become due.
Citing as an example, the lawsuit states that on February 16, 2021, Washington Prime had withheld an interest payment of $23.2 million that had been due the day before on outstanding Senior Notes due 2024, and that the company had a 30-day grace period to make the interest payment before defaulting.
Following the disclosure, Washington Prime stock price fell $4.59, or 38%, to close at $7.49 per share.
On March 4, 2021, after Bloomberg reported that Washington Prime was preparing a potential bankruptcy filing, the stock fell further to $3.77, or 60%, to close at $2.51 per share.
Twelve days later in announcing that it had entered into a forbearance agreement with respect to those Senior Notes due in 2024, Washington Prime also revealed that there was “substantial doubt as the Company’s ability to continue as a going concern.” The Company confirmed that it had engaged in discussions for a financial restructuring.
Since then, Washington Prime has been granted several two-week and one-week extensions of the forbearance deadline, the latest of which expires on Wednesday.
The suit claims that Washington Prime’s “wrongful acts and omissions” have caused at least hundreds of thousands of investors to suffer significant losses.
Slipher’s attorney is seeking a jury trial to determine if Washington Prime and the two executives violated the Security and Exchange Act and asks for unspecified compensatory damages, as well as legal expenses.
Washington Prime has not yet filed a response to the complaint.