VEREIT, Inc. announced today that on June 7, 2018, VEREIT, Inc. and VEREIT Operating Partnership entered into a settlement agreement and release to settle the previously disclosed litigation with Vanguard Specialized Funds, and other Vanguard funds serving as plaintiffs in the action pending in the United States District Court for the District of Arizona captioned Vanguard Specialized Funds, et al. v. VEREIT, Incorporated, et al., No. CV-15-02157-PHX-JAS.
Vanguard’s claims arose out of the disclosures made by the Company in October 2014 and March 2015 regarding its financial statements, which included the Company’s March 2015 restatement of certain of its previously issued financial statements. Pursuant to the terms of the settlement agreement, the parties have agreed that Vanguard will dismiss all claims against the company and the other defendants with prejudice and the company will pay Vanguard the sum of $90 million in connection with the settlement of the claims.
The Settlement Agreement contains mutual releases by both Vanguard and the Company, although the Company retains the right to pursue any and all claims against the other defendants in the Action and/or third parties, including claims for contribution for amounts paid in the settlement. The Settlement Agreement does not contain any admission of liability, wrongdoing or responsibility by any of the parties.
VEREIT leaders say they are pleased to have brought Vanguard’s lawsuit to a conclusion.
Vanguard’s holdings accounted for approximately 13 percent of VEREIT’s outstanding shares of common stock held at the end of the period covered by the various pending shareholder actions. In light of the fact that the Vanguard lawsuit was proceeding in a different federal district court than the other related cases pending against VEREIT, VEREIT believes that if the Vanguard lawsuit continued, it could find itself facing successive trials on similar factual and legal issues that could have subjected VEREIT to increased legal risk. Based on these factors and others, we believe that the settlement with Vanguard is in VEREIT’s best interest.
There can be no assurance as to whether or how this settlement may affect any potential future resolution of any other pending lawsuit, the timing of any such resolution, or the amount at which any other matter may be resolved.