HCP (NYSE:HCP) announced that it, together with three of its tenants,
has filed complaints against Sunrise Senior Living, Inc. and its
subsidiaries (“Sunrise”) based on Sunrise’s defaults under management
and related agreements covering 64 HCP-owned properties operated by
Sunrise. The complaints, filed in the Delaware Chancery Court on June
29, 2009, allege, among other things, that Sunrise systematically
breached various contractual and fiduciary duties, including 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
addition to equitable relief and money damages relating to the defaults,
HCP and its tenants are seeking judicial confirmation of rights to
terminate the agreements on the 64 properties.
HCP became the owner of 101 senior housing communities operated by
Sunrise through its 2006 acquisition of CNL Retirement Properties, Inc.
As previously disclosed, HCP transitioned 11 of those communities to a
new operator in December 2008, and shortly thereafter notified Sunrise
that it was in default of its obligations under the agreements for the
remaining 90 communities. Sunrise responded to HCP’s default notices by
denying that it was in violation of its agreements in any material
respect. The agreements provide Sunrise with various periods to cure the
defaults, which periods have now expired. More recently, HCP announced
that the management agreements on 15 additional Sunrise-managed
communities were terminated effective October 1, 2009.
ABOUT HCP
HCP, Inc., an S&P 500 company, is a real estate investment trust (REIT)
that, together with its consolidated subsidiaries, invests primarily in
real estate serving the healthcare industry in the United States. As of
March 31, 2009, HCP’s portfolio of properties, excluding assets held for
sale but including properties owned by unconsolidated joint ventures,
totaled 692 properties among the following segments: 264 senior housing,
100 life science, 254 medical office, 23 hospital and 51 skilled
nursing. For more information, visit the Company’s website at www.hcpi.com.
FORWARD-LOOKING STATEMENTS
The statements contained in this release which are not historical facts
are forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. These statements are subject to risks and uncertainties that could
cause actual results to differ materially from those set forth in or
implied by forward-looking statements. These risks and uncertainties
include general economic conditions, the risks associated with
litigation in general, including the costs and time that must be devoted
to litigation, the potential diversion of management attention that may
result from being engaged in litigation, and the possibility of adverse
results, the disruption to HCP’s operations being more severe than
currently expected, and other risks and uncertainties detailed from time
to time in the Company’s filings with the Securities and Exchange
Commission. While the Company anticipates that subsequent events and
developments may cause its views to change, it specifically disclaims
any obligation to update these statements. These statements should not
be relied upon as representing the Company’s views as of any date
subsequent to the date of this press release.
HCP
James F. Flaherty III
Chairman and Chief Executive Officer
562-733-5100
