Washington Prime Group, Inc. (WPG) Made Misstatements Regarding its Deteriorating Financial Condition
WPG failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, defendants failed to disclose to investors that: (1) WPG’s financial condition was deteriorating substantially; (2) there was substantial uncertainty about the Company’s ability to meet its capital structure obligations as they came due; and (3) as a result, the positions statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On February 16, 2021, WPG disclosed that its operating partnership, WPG L.P., had “elected to withhold an interest payment of $23.2 million due on February 15, 2021 with respect to WPG L.P.’s outstanding Senior Notes due 2024,” and that “WPG L.P. has a 30-day grace period to make the interest payment before such non-payment constitutes an ‘event of default.’” The Company further advised that, in an event of default, certain counterparties to the senior notes “could accelerate the outstanding indebtedness due . . . making such indebtedness due and payable, which would result in a cross-default with respect to some of WPG L.P.’s or the Company’s other indebtedness.” On this news, the Company’s stock price fell $4.59, or 38%, to close at $7.49 per share on February 16, 2021.
Then, on March 4, 2021, Bloomberg reported that WPG “is preparing a potential bankruptcy filing as time runs out to avert default after it skipped an interest payment on its debt, according to people with knowledge of the plans.” On this news, the Company’s stock price fell $3.77, or 60%, to close at $2.51 per share on March 4, 2021.
On March 16, 2021, after the market closed, WPG disclosed that it had entered into a forbearance agreement with respect to the Senior Notes due in 2024 and stated 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.
If you purchased shares of Washington Prime Group, Inc. (WPG) between November 5, 2020 and March 4, 2021, you have until July 23, 2021, to ask the court to appoint you lead plaintiff for the class.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.