KBS Hid Poor Health Of $1.7B REIT, Investors Say

Law360, New York (May 9, 2012, 8:05 PM EDT) -- A pair of Florida investors on Tuesday hit KBS Real Estate Investment Trust Inc. with a proposed class action, accusing the REIT of misrepresenting the risk level and performance of its flailing $1.7 billion KBS REIT I fund.

Lead plaintiffs George and Marianne Stewart say they invested $123,000 in KBS REIT I, based on KBS’ representations that the fund was a conservative bet, but discovered that the fund’s managers squandered shareholders’ money by purchasing underperforming real estate and paying out inflated distributions.

“[KBS] misrepresented the investment...
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