Complaints filed in court against Sunrise Senior Living
Washington Business Journal
HCP Inc., which owns retirement communities managed by Sunrise Senior Living Inc., has filed complaints against the company and some of its subsidiaries alleging breach of contract.
The complaints, which were filed in Delaware Chancery Court and also allege breach of fiduciary duty, involve 64 communities managed by McLean-based Sunrise for HCP, according to news releases issued by both companies.
HCP, based in Long Beach, Calif., said in its release that Sunrise defaulted on management agreements through actions that include “operating the properties in a manner that impermissibly favored the interests of Sunrise and its affiliates at the expense of HCP and its tenants.”
In its court filings, HCP is seeking monetary damages for the alleged defaults and the right to terminate the agreements for the 64 properties.
Responding to the allegations, Sunrise CEO Mark Ordan stated that HCP’s litigation is “just another attempt to unlawfully terminate our agreements, and we will enforce our rights vigorously on behalf of all Sunrise stakeholders.”
He said, “The communities have steadily improved their performance yet HCP has continually expressed their desire to terminate their agreements.”
Earlier this month, HCP said it terminated management contracts at 15 communities operated by Sunrise. HCP cited a failure to meet performance goals.
In 2006, HCP obtained 101 Sunrise-managed properties when it acquired CNL Retirement Properties Inc. It terminated Sunrise contracts at 11 of those properties in 2008.
In Monday’s announcement, Sunrise (NYSE: SRZ) said most of its management agreements with HCP (NYSE:HCP) expire between 2028 and 2038, although Sunrise holds extension options.
Most Read Stories |
Most Emailed Stories |
