Sunrise Senior Living, Inc. (NYSE:SRZ) Investor Files Lawsuit Over Alleged Breaches Of Fiduciary Duties In Connection With The Proposed Takeover By Health Care REIT, Inc.

If you purchased shares of Sunrise Senior Living, Inc. (NYSE:SRZ) prior to August 22, 2012, and currently hold any of those NYSE:SRZ shares, you have certain options and you should contact the Shareholders Foundation, Inc.

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Company Name(s): 
Sunrise Senior Living
Case Name: 
Sunrise Senior Living Deal Case 09/10/2012
Case Status: 
Lawsuit Filed
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 

Sept. 10, 2012 (Shareholders Foundation) -- An investor in shares of Sunrise Senior Living, Inc. (NYSE:SRZ) filed a lawsuit against directors in effort to block the proposed buyout for $14.50 per NYSE:SRZ share.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:SRZ investors arising out of the attempt to sell Sunrise Senior Living too cheaply via an unfair process to Health Care REIT, Inc.

On August 22, 2012, Sunrise Senior Living, Inc. (NYSE: SRZ) announced that it has entered into a merger agreement under which Health Care REIT, Inc. (NYSE: HCN) will acquire all of the outstanding common stock of Sunrise Senior Living, Inc for $14.50 per share in an all-cash transaction.

However, the plaintiff claims that the $14.50offer is unfair to NYSE:SRZ stockholders and undervalues the company. The plaintiff says that while NYSE:SRZ shareholders are being cut out of the picture, the Company’s management is staying on board for the long term. For instance, so the plaintiff, for a cash purchase price of just $844.6 million, the proposed Acquisition includes a real estate pipeline of more than $2 billion that Health Care REIT, Inc. can realize over time by purchasing additional interests from existing Sunrise joint venture partners.
Furthermore, so the plaintiff, the board of directors and Company management, who control over 8.3% of Sunrise Senior Living’s outstanding shares, drove the process leading to the Proposed Acquisition in order to create a liquidity event for their highly illiquid block of Company shares. The plaintiff says that they will cumulatively receive over $73 million for their shares from the consummation of the Proposed Acquisition.

In addition, so the plaintiff, the board of directors created a playing field that is tilted in favor of Health Care REIT, Inc. by agreeing to a no shop, a matching rights, and a $40million termination fee provision in derogation of their fiduciary duties to Sunrise’s shareholders. The plaintiff says that there provisions substantially and improperly limit the board of directors’ ability to act with respect to investigating and pursuing superior proposals and alternatives, including a sale of all or part of Sunrise Senior Living, Inc.