Opinion ID: 216819
Heading Depth: 4
Heading Rank: 1

Heading: Impact of Claimed Truthful Disclosures

Text: In its first argument, HCP contends that Ventas was required to prove that significantly wrongful conductalleged misrepresentations, not truthful disclosurescaused its injury, and that Ventas failed to carry this burden. (HCP Br. at 27-28.) Put another way, HCP asserts that Ventas failed to offer any proof that would allow the jury to separate the impact of any misrepresentations from that of any truthful statements. This is significant, HCP argues, because its February 14, 2007 press release contained the truthful statement that HCP was willing to pay $18.00 per unit for Sunrise. HCP asserts that the unitholders rejected Ventas' initial offer for the obvious reason that HCP was willing to pay more. ( Id. at 27.) Investor reliance on such a truthful statement, HCP continues, is insufficient to support the verdict because it cannot amount to improper interference. ( Id. at 27-28 (citing Restatement (Second) of Torts § 772(a) & cmt. (b)).) HCP relies on this Court's decision in Technology for Energy Corp. v. Scandpower, 880 F.2d 875 (6th Cir.1989). In Scandpower, we held that the presence of a truthful statement that accompanied a false statement defeated the element of causation in that case because the truthful statement alone was sufficient to `doom' [the] bid. Id. at 878. HCP argues that this case is analogous to Scandpower as no Sunrise unitholder testified that its vote was affected by any alleged misrepresentation. (HCP Br. at 31.) We find HCP's argument unavailing. HCP's argument rests on the faulty factual premise that HCP was willing to pay $18 per unit of Sunrise, and that this stated willingness was independently truthful. ( See id. at 30.) Indeed, the jury could reasonably have found that HCP made no such statement, and that even if it did, the statement was not independently truthful. The jury could reasonably have found that HCP never stated that it was willing to pay $18.00 per unit. HCP's February 14, 2007 press release merely stated that HCP had submitted a proposal to acquire the assets of [Sunrise] in a transaction that values each [ ] unit at Cdn$18. (App. at 454-55.) The press release then described the proposed transaction as containing an acquisition agreement that ... is otherwise identical to the agreement between Sunrise [ ] and Ventas. It further stated that HCP was confident that it would reach a deal with SSL and that its proposed acquisition of Sunrise had a greater certainty of completion than the Ventas transaction. The press release only references the offer of $18.00 per unit as part of an overall transaction. Even if the jury found that HCP had stated its willingness to pay $18.00 per unit, the jury reasonably could have also found that such a statement was not truthful. HCP never made an unencumbered assertion that it was willing to pay $18.00 per unit, and the jury could reasonably have found that HCP's announcement of its proposed transaction was contaminated by fraud, misrepresentations, and concealment. See Dennis v. Thomson, 240 Ky. 727, 43 S.W.2d 18, 23 (1931) ([C]ausing a false impression constitutes a palpable fraud, even though the statement is true as far as it goes, since such concealment is in fact a false representation of that which is disclosed, as the whole truth.). HCP failed to disclose in its February 14, 2007 press release that its offer was conditioned on reaching an agreement with SSL. HCP also failed to disclose that HCP and SSL had previously failed to reach an agreement during the auction process; that HCP and SSL otherwise had a tense relationship that could frustrate future attempts to negotiate an agreement; and that HCP was a party to a Standstill Agreement with Sunrise that may have prohibited HCP from making an offer for Sunrise in the first place. Rather than disclosing these details, HCP misled the market by announcing that the terms of its proposed acquisition of Sunrise were identical to the transaction entered into by Ventas, and the proposed acquisition itself had greater certainty of completion. Moreover, HCP's conduct at the time of its purported offer casts further doubt on the genuineness of its offer. HCP never sent Sunrise a signed, unconditional offer. The purchase agreement that HCP sent to Sunrise made no mention of a condition. Sunrise described HCP's omission of a signature as unprecedented (Tr.3A at 47) and tantamount to a bait and switch. (App. at 456.) When confronted about the missing signature, HCP CEO Flaherty falsely stated to Sunrise's banker that he had sent a signed agreement via Federal Express. Flaherty subsequently admitted, however, that he did not do this and in fact was not authorized by HCP to make an unconditional bid. (Tr.4B at 32-34.) Ventas also presented evidence that HCP stated it was moving on to other things in January of 2007 after it was unable to reach an agreement with SSL, and in fact, on February 21, 2007, made a $3.1 billion proposal to buy another company, referred to as Slough. (Tr.2A at 39; Tr.4B at 96.)