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Shareholders file complaint against Wheeler REIT over noncompliance

JCP Investment Partnership LP and its affiliates filed a complaint for declaratory and injunctive relief against Wheeler Real Estate Investment Trust Inc. stating that the company failed to comply with the requirements of its asset coverage provision, thereby causing "tens of millions of dollars" in damages for the holders of its preferred stock.

The complaint, filed June 28 in the Circuit Court for Baltimore County, Md., seeks to halt the shopping center landlord's bid to unilaterally amend its articles supplementary in order to avoid the mandatory redemption of certain shares of its preferred stock, including the shares required by the asset coverage provision.

According to the complaint, the certificate of corrections filed by Wheeler REIT substantially altered the terms of the shares and the rights of holders of preferred stock without a vote.

The investors requested that the court compel Wheeler REIT to redeem its preferred stock in accordance with the articles supplementary.