Company: Whitestone REIT
Class Period: May 9, 2018 — February 27, 2019
Court: U.S.D.C. – Southern District of Texas
A shareholder class action complaint has been filed against Whitestone REIT (“Whitestone”) on behalf of investors who purchased shares of the Company’s stock between May 9, 2018 and February 27, 2019 (the “Class Period”).
Whitestone owns and operates 57 commercial properties totaling 4.8 million square feet of gross leasable area in Texas, Arizona and Illinois. As of December 31, 2018, its property portfolio had a gross book value of $1.1 billion. Whitestone has elected to be taxed as a REIT under the Internal Revenue Code of 1986. Additionally, through an investment in Pillarstone Capital REIT Operating Partnership LP (“Pillarstone OP”), Whitestone owns a majority interest in 11 properties containing approximately 1.3 million square feet of gross leasable area.
According to the complaint, during the Class Period the defendants made a series of false and misleading statements to investors, and failed to disclose that: (1) the Company lacked effective internal control over financial reporting; (2) Whitestone was incorrectly recognizing assets and liabilities associated with its contribution to Pillarstone Capital REIT Operating Partnership LP; (3) the Company’s financial statements for the fiscal year 2018 were overstating revenues; and (4) the Company’s financial statements for the fiscal year 2018 could no longer be relied upon.
On February 27, 2019, Whitestone disclosed that its Audit Committee “concluded that the Company’s unaudited consolidated financial statements as of and for the periods ended March 31, 2018, June 30, 2018 and September 30, 2018 … should be restated” to correct accounting errors and “should no longer be relied upon.” Following this news, shares of the company’s stock declined $2.07 per share, or over 14.5% in value, to close on March 1, 2019 at $12.18 per share.
Whitestone stockholders who acquired shares of the Company’s common stock prior to May 9, 2918 are encouraged to contact Kaskela Law LLC at (888) 715 – 1740, or by completing the form on this page, to receive additional information about this action and their legal rights and options.