Wells Real Estate Investment Trust, Inc. NASD: REIT

A securities class action was commenced in the United States District Court for the District of Maryland against Wells Real Estate Investment Trust, Inc. ("Wells REIT" or the "Company"), and certain of its affiliates, officers and directors. Wells REIT, a real estate investment trust whose stock is not traded on a national stock exchange, is primarily engaged in the acquisition and ownership of commercial real estate properties. The Complaint was filed on behalf of a proposed class ("Class") of the Company's stockholders who are entitled to vote on Wells REIT's proxy statement that was filed with the SEC on February 26, 2007 ("Proxy"). The Complaint also includes derivative claims asserting wrongdoing on behalf of Wells REIT against certain defendants.

The Complaint, which seeks damages and other appropriate relief for the Class and the Company, charges defendants with violations of the federal securities laws, including Sections 14(a) and 20 of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder. The Proxy seeks shareholder approval to merge affiliates of the Company (the "Advisor") into Wells REIT for $175 million worth of the Company's stock ("Internalization"). The Advisor is wholly owned by officers and directors of Wells REIT and thus the Internalization is a self-dealing transaction that must receive the utmost scrutiny by the Class and the Company. The Complaint charges that the Internalization does not stand up to that scrutiny. Among other things, the Complaint alleges that the Proxy is false, misleading and omits material information concerning the fact that: (a) the Internalization makes no economic sense to the Class and the Company given the likelihood that the Company will liquidate starting January 30, 2008; (b) they purport to sell the Advisor to the Company, but will continue to extract fees from the Company for advisory-type services; (c) recent comparable transactions reveal that the value placed on this Advisor is excessive and the Internalization transaction itself is not justified; (d) the Internalization is being used as an alternative exit strategy for the Advisor and its owners to end-run existing contractual provisions governing the Advisor's fees and to extract fees when they otherwise could receive nothing; and (e) the so-called fairness opinion obtained by defendants to support the Internalization and the value of the Advisor is materially flawed and based on unsupported assumptions. The Complaint also alleges that the Advisor and certain defendants owe fiduciary duties to the shareholders and the Company and breached those duties by entering into the Internalization which constitutes an abusive and self- dealing transaction, a waste of the Company's assets and puts their own personal self-interests above those of the Company and its shareholders.

If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements. 


Law Suits Filed
Accredited Home Lenders Holding Co.
NASD: LEND Company: Accredited Home Lenders Holding Co.
Ticker Symbol: NASD: LEND
Class Period: November 1, 2005 to March 12, 2007
Date Filed: Mar-17-07
Lead Plaintiff Deadline: May-15-07
Court: Southern District, CA
 
Allegations: A class action has been commenced in the United States District Court for the Southern District of California on behalf of purchasers of Accredited Home Lenders Holding (Nachrichten) Co. (“Accredited“?) (NASDAQ:LEND) common stock during the period between November 1, 2005 and March 12, 2007 (the “Class Period“?). The complaint charges Accredited and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Accredited operates as a mortgage banking company in the United States and Canada. The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results. As a result of defendants' false statements, Accredited stock traded at artificially inflated prices during the Class Period, reaching a high of $58.45 per share on May 11, 2006. On February 14, 2007, the Company issued a press release announcing disappointing profitability. Then, on March 12, 2007, after the market closed, the Company issued a press release announcing that the Company was exploring various strategic options. The Company reported that it had paid approximately $190 million in margin calls on its facilities since January 1, 2007. In addition, Accredited was seeking waivers and extensions of waivers of certain financial and operating covenants under its warehouse and repurchase facilities. On March 13, 2007, Accredited's stock collapsed $7.43 per share to close at $3.97 per share, a one-day decline of 65% on volume of 41.9 million shares, 20 times the average three-month volume. According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company lacked requisite internal controls, and, as a result, the Company's projections and reported results issued during the Class Period were based upon defective assumptions and/or manipulated facts; (b) the Company's financial statements were materially misstated due to its failure to properly account for its allowance for loan repurchase losses; (c) given the deterioration and the increased volatility in the sub-prime market, the Company would be forced to tighten its underwriting guidelines which would have a direct material negative impact on its loan productions going forward; and (d) given the increased volatility in the sub-prime market, the Company had no reasonable basis to make projections about its 2007 results. As a result, the Company's projections issued during the Class Period about its 2007 results were at a minimum reckless. As a result of defendants' false statements, Accredited's stock price traded at inflated levels during the Class Period. However, after the above revelations seeped into the market, the Company's shares were hammered by massive sales, sending them down more than 65% from their Class Period high.

Subprime's Deals, Dow Jones's Lesson, $1 Trillion Club: Timshel
By David Wilson
June 5 (Bloomberg) 
Accredited Home Lenders Holding Co.'s acceptance of a $400 million buyout offer shows the dealmaking sparked by the near-collapse of the subprime mortgage industry this year isn't over yet. The San Diego-based company agreed to a $15.10-a-share bid from Lone Star Funds, a private-equity firm that specializes in bad loans and real estate. The price is four times the stock's low of $3.77 in March, when Accredited Home's then-auditor questioned whether the lender would survive. Yesterday's deal was the first to be announced in six weeks. H&R Block Inc., the largest U.S. tax preparer, said on April 20 that Cerberus Capital Management LP -- another private- equity firm -- would buy its Option One subprime unit.

There's more to come in the industry, serving homebuyers whose credit ratings are less than ideal. ResMae Mortgage Corp., a Brea, California-based company that filed for bankruptcy in February, is looking to sell its assets for $180 million to Citadel Investment Group, a hedge-fund manager. NovaStar Financial Group, another lender battered by the industry's slump, put itself up for sale in April. The Kansas City, Missouri-based company later received $1.9 billion in financing from Wachovia Corp. to keep providing mortgages. Even Accredited Home may attract more attention. Farallon Capital Management LLC held acquisition talks with the company in March before making a $200 million loan. The hedge fund is its fifth-largest stockholder, with a 7 percent stake. Bidding Competition The possibility of another offer from Farallon, based in San Francisco, or a higher bid from Lone Star sent Accredited Home's shares above the buyout price. They closed at $15.12 yesterday, a gain of 9.9 percent, and peaked at $15.44. NovaStar's shares added 5.6 percent and traded at a three- month high of $7.94. Fremont General Corp., which has closed its subprime unit, agreed to sell a commercial-lending business and brought in new management led by billionaire banker Gerald J. Ford, advanced 0.8 percent to $12.99.

Private-equity firms and hedge funds aren't the only buyers of subprime lenders. Credit Suisse Group, Switzerland's second- largest bank, made the last deal announced before the sale of Option One. The firm agreed to buy Lake Oswego, Oregon-based Lime Financial Services for an undisclosed price in April. The industry has fallen so far that even takeover offers may not make shareholders whole. Accredited Home changed hands for more than $20 a share as recently as March 2, when subprime mortgage companies were starting their descent. Showing Some Profits Second Curve Capital LLC, led by former bank analyst Thomas Brown, built an 8.5 percent stake in Accredited Home before the stock collapsed. The New York-based hedge fund later purchased more shares, bringing its stake to 11 percent. The $15.10-a-share offer would enable Second Curve to show a profit on some of its investment, even if it wouldn't make the firm whole. Brown and his colleagues most recently bought 75,000 shares at $12.26 each, according to a May 21 filing. Bigger profits, or at least smaller losses, may lie ahead for investors in subprime stocks as the deals keep coming.