Maryland Trial Court Dismisses Claims Against NHP Directors in Stock-for-Stock Merger with Ventas

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In a sweeping ruling filed late last Friday, received Tuesday, Judge Stuart Berger of the Business and Technology Case Management Program of the Circuit Court for Baltimore City granted defendants' motion to dismiss and dismissed with prejudice the Consolidated Amended Complaint attacking the proposed 100% stock-for-stock merger of Nationwide Health Properties, Inc. with and into Ventas, Inc. In re Nationwide Properties Shareholders Litigation, No. 24-C-11-001476 (Md. Cir. Ct. May 27, 2011). The Complaint alleged the usual claims of unfair process/inadequate consideration, preclusive transaction-protection measures, misstatements and omissions in the registration statement and personal benefits for directors and officers and sought to enjoin the forthcoming shareholder vote, rescind the merger agreement and recover damages.

At the outset, Judge Berger reiterated that "facts comprising the cause of action must be pleaded with sufficient specificity," including, as required by Maryland Rule of Procedure 2-305, "a clear statement of the facts necessary to constitute a cause of action . . . ." For emphasis, he added: "Bald assertions and mere conclusory charges will not suffice." Referring to "cases where courts have observed a 'cookie-cutter'-like flavor to complaints filed in similar securities litigation," the Judge nevertheless said he would "resist the urge, however tempting, to comment on this apparent trend in securities litigation."

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