Investor Alert: Kaplan Fox Announces Investigation Of Omega Healthcare Investors

NEW YORK, Nov. 29, 2017

A class action complaint has been filed in the United States District Court for the Southern District of New York against Omega Healthcare and certain officers on behalf of persons or entities that acquired Omega Healthcare securities between February 8, 2017 and October 31, 2017, inclusive (the "Class") alleging violations of the Securities Exchange Act of 1934 ("Exchange Act").

On July 26, 2017, after the market closed, the Company issued a press release announcing its second quarter 2017 financial results.  In connection with second quarter results, the Company held a conference call on July 27, 2017 during which the Company discussed operational issues at two of its top ten operators.  Despite liquidity concerns at these two operators, Omega Healthcare's Chief Operating Officer, Daniel J. Booth ("Booth"), stated that "while the ultimate outcome of these two portfolio issues could potentially cause a continuing but temporary interruption of current rent and prompt further discussions, we remain confident in both current management team's expertise."  Further, Booth stated that "we're confident that the physical assets themselves and the strong markets within which they are located provide comfort in the long-term longevity and future success of these facilities."  Additionally, despite these concerns, the Company increased its 2017 guidance for Adjusted Funds From Operations ("Adjusted FFO") to be between $3.42 and $3.44 per diluted share from Adjusted FFO between $3.40 and $3.44 per diluted share given at the start of the Class Period, February 8, 2017.

Then, on October 30, 2017, after the market closed, Omega Healthcare issued a press release announcing its third quarter 2017 financial results.  For the three-month period ended September 30, 2017, the Company reported operating revenue of $220 million compared to operating revenue of $225 million for the same period in 2016, as well as a net loss of $137.5 million compared to net income of $82.1 million for the same period in 2016.  Among other things, Omega Healthcare reported approximately $204 million of surprise impairments related to the Company's Orianna Health Systems portfolio ("Orianna"), including $194.7 million in impairments on direct financing leases related to Orianna.  Following these disclosures, the Company's stock price fell $2.11 per share, or 6.8%, to close at $28.86 per share on October 31, 2017. 

The complaint alleges that throughout the Class Period, defendants failed to disclose (1) that financial and operating results of certain of the Company's operators were deteriorating, (2) that, as a result, certain of the Company's operators were experiencing worsening liquidity issues that were significantly impacting the operators' ability to make timely rent payments, (3) that, as a result, certain of the Company's direct financing leases were impaired and certain receivables were uncollectible, and (4) that, as a result of the foregoing, defendants' statements about Omega Healthcare's business, operations, and prospects, were materially false and/or misleading and/or lacked a reasonable basis.

If you are a member of the proposed Class, you may move the court no later than January 15, 2018 to serve as a lead plaintiff for the purported class.  You need not seek to become a lead plaintiff in order to share in any possible recovery.  If you would like to discuss the complaint or our investigation, please contact us by emailing pmayer@kaplanfox.com or by calling 800-290-1952.

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