Hines Real Estate Investment Trust Inc., a publicly registered non-traded real estate investment trust, has agreed to pay approximately $3.3 million to settle a class action lawsuit that was filed in August 2016.
According to a filing with the Securities and Exchange Commission, stockholders filed the lawsuit in the Circuit Court of Maryland for Baltimore City alleging that Hines REIT, its advisor, and directors breached their fiduciary duties, caused the waste of corporate assets, and misappropriated corporate assets in connection with certain payments made in connection with the company’s plan of liquidation.
Hines said in a letter to shareholders that it “strongly believes that the lawsuit has no merit.”
“The company and the defendants recognize the burden, expense, and uncertainties inherent in further litigation, which has delayed the issuance of a final liquidating distribution to the stockholders and the completion of the wind up of the company,” the company said.
The court preliminarily approved the proposed settlement which requires the defendants to distribute approximately $3.3 million, less attorneys’ fees and other awards, to the company’s shareholders.
If approved by the court, shareholders of record as of March 2, 2018, will receive a pro rata portion of the settlement. The settlement hearing is scheduled on June 6, 2018.
Hines REIT expects to make a final liquidating distribution of between $0.05 – $0.07 per share following the hearing, which will complete the winding up of the company’s operations.
Hines REIT, which was formed in August 2003 to invest in commercial real estate with a focus on office properties, has raised $2.3 billion in investor equity prior to closing its offering in January 2010. Stockholders approved the REIT’s plan of liquidation and dissolution in November 2016. Hines REIT was the first of three non-traded REITs sponsored by the international real estate firm.