A lawsuit has been filed against Medical Properties Trust (MPW). The complaint alleges that the defendants engaged in deceptive practices by misrepresenting the financial state of Medical Properties. Specifically, the company used sale-leaseback agreements to mask the financial distress of its tenants, allowing them to meet their obligations in the short term. Additionally, the defendants fraudulently transferred large sums of money to financially struggling tenants, effectively bailing them out. To conceal these transfers, the company used fictitious construction projects that purportedly had high capital expenses. However, it was discovered that the company had entered into “triple-net leases,” which required its tenants to pay a significant portion of expenses.
On January 26, 2023, Viceroy Research released a critical report that accused Medical Properties of engaging in uncommercial transactions with its tenants, concealing a round-robin scheme and/or theft. Viceroy also sent a letter to the company’s auditor on February 2, 2023, highlighting concerns about distressed tenants, uncollectible accrued revenues, and impaired asset values.
Finally, on February 23, 2023, the company announced its Q4 and full-year 2022 financial results, which included a massive $171 million impairment charge related to four properties leased to Prospect and a $112 million write-off on unbilled Prospect rent. These revelations caused Medical Properties’ share prices to plummet.
Contact us if you invested in Medical Properties and have substantial losses, or have knowledge that may assist the firm’s investigation