SunWest Mortgage
Practice Area: Securities Fraud
Cohen Milstein represents plaintiffs in a class action lawsuit in Oregon on behalf of entities victimized by a fraudulent investment scheme. According to the complaint, between 2001 and 2008, Sunwest Management and other affiliated entities (“Sunwest”) purchased approximately two hundred and fifty senior housing communities. The complaint alleges that the financial performance of these senior housing communities was inadequate to sustain this business, and that the perpetuation and growth of Sunwest depended on making additional purchases (and enticing participation by new tenancy-in-common or “TIC” investors) to keep the operation afloat and pay the sums due existing TIC investors. Additionally, the complaint alleges that hundreds of millions of dollars of securities were sold to TIC investors through the use of written statements such as disclosure memoranda prepared by the Defendants that omitted material facts. According to the complaint, this conduct continued until about June 2008, when Sunwest’s poor economic performance forced it to discontinue payments to plaintiffs and other class members.
The suit is being brought against the law firm of Davis Wright Tremaine LLP (“Davis Wright”) for violations of Oregon securities laws. The complaint alleges that Davis Wright was heavily involved in the structuring, promotion and implementation of the TIC sales. The complaint further alleges that Davis Wright supervised, designed, and implemented the sales transactions and made omissions of material fact in direct communications with the defrauded investors and brokers working with investors.
The action was initially filed in Oregon state court. After the parties reached a settlement, a class action was filed in the United States District Court for the District of Oregon to effectuate the settlement. On February 9, 2011, the federal court approved the settlement, which provides for payment of $30 million by Davis Wright.