united states district court class action ......shopping malls, open-air and mixed-use centers,...

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF TENNESSEE

CHATTANOOGA DIVISION

PLAINTIFF, ), Individually and on )

Behalf of All Others Similarly Situated, ))

Plaintiff, ))

vs. ))

CBL & ASSOCIATES PROPERTIES, INC., )CBL & ASSOCIATES LIMITED )PARTNERSHIP, STEPHEN D. LEBOVITZ, )FARZANA K. MITCHELL and JOHN N. )FOY, )

)Defendants. )

)

Civil Action No.

CLASS ACTION

COMPLAINT FOR VIOLATION OF THEFEDERAL SECURITIES LAWS

DEMAND FOR JURY TRIAL

TABLE OF CONTENTS

Page

INTRODUCTION ...........................................................................................................................1

JURISDICTION AND VENUE ......................................................................................................3

PARTIES .........................................................................................................................................4

BACKGROUND .............................................................................................................................6

DEFENDANTS’ FALSE AND MISLEADING STATEMENTS ..................................................7

THE TRUTH BEGINS TO BE REVEALED ...............................................................................38

APPLICABILITY OF THE PRESUMPTION OF RELIANCE: FRAUD ON THEMARKET...........................................................................................................................41

CLASS ACTION ALLEGATIONS ..............................................................................................42

COUNT I .......................................................................................................................................44

COUNT II ......................................................................................................................................44

PRAYER FOR RELIEF ................................................................................................................45

JURY DEMAND...........................................................................................................................45

Plaintiff makes the following allegations based upon the investigation of plaintiff's counsel,

which included a review of regulatory filings made by CBL & Associates Properties, Inc. (“CBL” or

the “Company”) with the U.S. Securities and Exchange Commission (“SEC"), as well as other

regulatory filings and reports, press releases, conference calls and other public statements issued by

the Company, and media reports about the Company. Plaintiff believes that substantial additional

evidentiary support will exist for the allegations set forth herein after a reasonable opportunity for

discovery.

INTRODUCTION

1. This is a federal securities class action brought on behalf of all persons who

purchased or otherwise acquired the common stock of CBL between August 9, 2011 and May 24,

2016, inclusive (the “Class Period”). This action seeks to recover damages caused by defendants’

violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15

U.S.C. §§78j(b) and 78t(a), and Rule 10b-5, 17 C.F.R. §240.10b-5, promulgated thereunder by the

SEC.

2. CBL purports to be a self-managed, self-administered, fully integrated real estate

investment trust (“REIT”). Through its affiliate, CBL & Associates Limited Partnership (the

“Operating Partnership”), CBL owns, develops, acquires, leases, manages and operates regional

shopping malls, open-air and mixed-use centers, outlet centers, associated centers, community

centers and office properties. CBL’s properties are located in 27 states but are primarily in the

southeastern and midwestern United States, including Tennessee. CBL is taxed as a REIT for

federal income tax purposes.

3. Throughout, and before, the Class Period, defendants CBL, the Operating Partnership,

CBL’s President and Chief Executive Officer (“CEO”), Stephen D. Lebovitz (“Lebovitz”), CBL’s

former Chief Financial Officer (“CFO”), Treasurer, and Secretary, John N. Foy (“Foy”), and CBL’s

current CFO and Treasurer, Farzana K. Mitchell (“Mitchell”), engaged in a scheme to defraud and

made numerous materially false and misleading statements and omissions to investors regarding

CBL’s business and operations, including by (a) repeatedly assuring investors that the Company was

in compliance with the financial covenants and restrictions imposed by the Company’s lenders;

(b) describing the Company’s purported successes in obtaining debt financing on multiple occasions

without disclosing the highly significant details regarding how the Company succeeded in obtaining

and maintaining that financing; (c) disclosing to investors the Company’s and Operating

Partnership’s representations to the Company’s financiers that they were providing to them accurate

financial information regarding the Operating Partnership’s unencumbered assets, including the

income from and occupancy rates of those properties; and (d) assuring investors that the Company

required its employees to comply with applicable laws and regulations, including those prohibiting

the provision of material non-public information to selected individuals. As a result of these false

statements and/or omissions, CBL common stock traded at artificially inflated prices during the

Class Period, reaching a high of $26.95 per share.

4. However, the facts that have become public over the past several months contradict

the Company’s representations during the Class Period. First, on November 3, 2015, The Wall

Street Journal reported that Senator Robert P. Corker, Jr. of Tennessee had made numerous well-

timed trades in CBL stock that had netted him substantial profits. Senator Corker’s fortunate timing

raised suspicions that CBL executives may have tipped the Senator to material non-public

information about the Company, especially in light of the “history” between CBL and the Senator,

which the Journal noted included campaign donations from CBL executives to the Senator and the

Senator having once worked indirectly for CBL.

5. Then, on May 24, 2016, The Wall Street Journal reported allegations that the

Company had falsified information on financial statements to banks when applying for financing

arrangements, in particular by inflating its rental income and its properties’ occupancy rates when

reporting those figures to banks. After initially calling this report “baseless,” the Company on June

13, 2016 issued a press release admitting that it was true the SEC was investigating the veracity of

information provided to banks in connection with four non-recourse secured loans originated in 2011

and 2012. With these revelations, it became apparent that the Company’s many representations to its

investors over the preceding years regarding its purported success in obtaining debt financing and in

complying with its lenders’ financial requirements were materially false and misleading. The May

24, 2016 article also reported that the FBI and SEC were also investigating Senator Corker’s trades

and the possibility that CBL executives had given Senator Corker material non-public information

that he then used to make those trades. In that regard, the article highlighted the Senator’s “close

personal, business and political ties with several members of the family that founded CBL and runs

it.”

6. Following these revelations, which began to uncover the relevant truth that had

previously been concealed from the market, CBL’s stock price declined. Specifically, CBL’s stock

price dropped 9.3% following the initial revelations about Senator Corker’s trades, from a close of

$14.85 per share on November 3, 2015 to a close of $13.47 per share on November 9, 2015.

Following the May 24, 2016 disclosures, the share price then plummeted 11.5% from a closing price

of $10.26 per share on May 24, 2016 to an opening price of $9.07 per share on May 25, 2016, and

then fell another $0.46 per share (4.5%) on June 13, 2016, after the Company’s admission that the

May 24, 2016 article was correct.

7. The stock price declines during the Class Period caused millions of dollars in losses

to CBL investors, who relied on the accuracy of defendants’ statements and suffered damages when

the truth began to be revealed. Plaintiff seeks to recover these losses on behalf of the investors who

purchased or otherwise obtained CBL shares during the Class Period.

JURISDICTION AND VENUE

8. The claims asserted herein arise under and pursuant to §§10(b) and 20(a) of the

Exchange Act, 15 U.S.C. §§78j(b) and 78t(a), and Rule 10b-5, 17 C.F.R. §240.10b-5, promulgated

thereunder by the SEC. This Court has jurisdiction over the subject matter of this action pursuant to

28 U.S.C. §1331 and §27 of the Exchange Act, 15 U.S.C. §78aa.

9. Venue is proper in this District pursuant to §27 of the Exchange Act, as defendants

transact business in this District, many of the false and misleading statements were made in or issued

from this District, and CBL’s principal executive offices are located in this District at 2030 Hamilton

Place Boulevard, Suite 500, Chattanooga, Tennessee 37421.

10. In connection with the acts, conduct and other wrongs alleged in this complaint,

defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,

including, but not limited to, the United States mail, interstate telephone communications and the

facilities of the national securities exchange.

PARTIES

11. Plaintiff purchased CBL common stock as described in the attached certification.

Plaintiff purchased CBL common stock at artificially inflated prices during the Class Period and

suffered an economic loss when the relevant truth was disclosed and the stock price declined.

12. Defendant CBL purports to be a self-managed, self-administered, fully integrated

REIT. CBL conducted an initial public offering (“IPO”) on November 3, 1993, and its stock trades

on the New York Stock Exchange (“NYSE”) under the ticker symbol “CBL.” CBL is headquartered

in Chattanooga, Tennessee, and it owns and operates properties throughout Tennessee, including

CoolSprings Galleria, CoolSprings Crossing and the Courtyard at Hickory Hollow in Nashville, as

well as Hamilton Place, Hamilton Corner, Hamilton Crossing, the Shoppes at Hamilton Place, the

Terrace, Gunbarrel Pointe, CBL Center, CBL Center II and Northgate Mall in Chattanooga.

13. Defendant Operating Partnership is the entity through which CBL conducts

substantially all of its business. CBL is the 100% owner of two subsidiaries, CBL Holdings I, Inc.

(“Holdings I”) and CBL Holdings II, Inc. (“Holdings II”). Holdings I is the sole general partner of

the Operating Partnership. As of December 31, 2015, Holdings I owned a 1.0% general partner

interest and Holdings II owned an 84.3% limited partner interest in the Operating Partnership, for a

combined interest held by CBL of 85.3%. Either the Operating Partnership or one of its

consolidated subsidiaries, in which it has a direct or indirect ownership interest, is the borrower on

all of CBL’s debt.

14. Defendant Lebovitz has served as President and CEO of the Company since January

1, 2010. From February 1999 until January 1, 2010, Lebovitz served as President and Secretary of

the Company. Lebovitz has served as a director of the Company since the completion of its IPO in

November 1993. He also serves as a member of the Executive Committee of the Board of Directors.

Since joining CBL’s predecessor in 1988, Lebovitz has also served as Executive Vice President –

Development/Acquisitions; Executive Vice President – Development; Senior Vice President – New

England Office; and Senior Vice President – Community Center Development and Treasurer of the

Company.

15. Defendant Foy served as CFO and Treasurer of CBL from the completion of CBL’s

IPO in November 1993 until September 10, 2012; as a director of CBL from November 1993 until

his retirement in December 12, 2012; and as the Vice Chairman of the Board of Directors of CBL

from February 1999 until December 12, 2012. He also served as Secretary of the Company from

November 1993 until February 1999 and again from January 1, 2010 until September 10, 2012.

16. Defendant Mitchell is the Executive Vice President – CFO and Treasurer of the

Company. Mitchell served as Executive Vice President – Finance of the Company from January

2010 through September 10, 2012, when she was promoted to her current positions. Previously,

Mitchell served as Senior Vice President – Finance of the Company from September 2000 through

January 1, 2010.

17. Defendants Lebovitz, Foy and Mitchell are collectively referred to as the “Individual

Defendants.”

18. As officers and/or directors and controlling persons of a publicly held company

whose common stock was and is traded on the NYSE and is governed by the provisions of the

federal securities laws, the Individual Defendants each had a duty to promptly disseminate accurate

and truthful information regarding the Company’s financial condition, performance, growth,

operations, financial statements, business, markets, management, earnings and present and future

business prospects and to correct any previously issued statements that had become materially

misleading or untrue so that the market price of the Company’s common stock would be based upon

truthful and accurate information. The Individual Defendants’ material misrepresentations and

omissions and participation in a scheme to defraud during the Class Period violated these specific

requirements and obligations.

19. The Individual Defendants participated in the drafting, preparation and/or approval of

the various public statements and other communications complained of herein; were aware of, or

recklessly disregarded, the misstatements contained therein and omissions therefrom; and were

aware of their materially false and misleading nature. Because of their Board membership and/or

executive positions with CBL, each of the Individual Defendants had access to the adverse

undisclosed information about CBL as particularized herein and knew, or recklessly disregarded,

that these adverse facts rendered the representations made by or about CBL (or adopted by the

Company) materially false and misleading.

20. The Individual Defendants, because of their positions of control and authority as

officers and/or directors of the Company, were able to, and did, control the content of the various

SEC filings and other public statements pertaining to the Company during the Class Period. Each

Individual Defendant was provided with copies of documents alleged herein to be misleading prior

to, or shortly after, their issuance and/or had the ability and/or opportunity to prevent their issuance

or cause them to be corrected.

21. Accordingly, each of the Individual Defendants is responsible for the accuracy of the

public reports, releases and statements detailed herein and/or participated in a scheme to defraud and

is therefore primarily liable for the conduct alleged herein.

BACKGROUND

22. CBL purports to be a self-managed, self-administered, fully integrated REIT.

Conducting substantially all of its business through the Operating Partnership, CBL owns, develops,

acquires, leases, manages and operates regional shopping malls, open-air and mixed-use centers,

outlet centers, associated centers, community centers and office properties. Because of the close

relationship between the entities, CBL and the Operating Partnership have, throughout the Class

Period, combined their periodic reports with the SEC into a single document for each period.

Accordingly, when this complaint refers to statements by “CBL” or the “Company,” those

statements are also statements by the Operating Partnership.

23. At all times relevant to this action, CBL has told its investors that it is “significantly

dependent upon external financing to fund the growth of [its] business and ensure that [it] meet[s]

[its] debt servicing requirements. [CBL’s] access to financing depends on the willingness of lending

institutions to grant credit to [it] and conditions in the capital markets in general.” Substantially

identical statements were made in each of CBL’s annual reports on Form 10-K for the years 2011

through 2015.

24. Given the unquestioned importance of external financing to CBL’s business, its

disclosures regarding the Company’s efforts to obtain and service financing were crucial pieces of

information. Investors and analysts paid close attention to these issues, and each of the defendants

knew the market was attuned to information about the Company’s financing efforts.

DEFENDANTS’ FALSE AND MISLEADING STATEMENTS

25. On November 9, 2007, the Company filed with the SEC its Second Amended and

Restated Code of Business Conduct and Ethics (the “Code of Ethics” or the “Code of Business

Conduct”). The Code of Ethics has not changed since that filing, and the Company continuously

promulgates it to actual and potential investors, with a prominent posting as one of two documents

listed on the “Governance Documents” section of the “Corporate Overview” page on the Company’s

website. The Code of Ethics states in relevant part:

Compliance with Laws, Rules and Regulations

The Company proactively promotes the full compliance by all employees ofapplicable laws, rules and regulations of any governmental unit, agency or divisionsthereof and the rules and regulations of the New York Stock Exchange and/or anyexchange upon which the Company’s stock may be traded. The Company hasadopted and will enforce its policies regarding an employee’s trading in the stock ofthe Company based on inside information and will require employees to abide bysuch policy as well as provisions of applicable law on trading on inside informationand all employees of the Company are directed to refrain from trading in theCompany’s stock based on inside information. The Company will require itsemployees to abide by applicable law and the Company’s procedures with respect to“blackouts” (periods of time within which all or some cross-section of theCompany’s employees will be prevented from trading in the Company’s stock). TheCompany will require its employees to abide by applicable law and the Company’spolicies with respect to disclosures of material non-public information (RegulationFD).

26. On August 9, 2011, CBL filed with the SEC a quarterly report on Form 10-Q. The

quarterly report was signed by defendant Foy, and contained certifications pursuant to the Sarbanes-

Oxley Act of 2002 (“Sarbanes-Oxley”) signed by Lebovitz and Foy. These certifications provided,

among other things, that the undersigned had reviewed the Form 10-Q and it contained no materially

untrue statements or omissions; fairly represented in all material respects the financial condition of

CBL; was accurate in all material respects; and disclosed any material changes to the Company’s

internal control over financial reporting.

27. The August 9, 2011 quarterly report disclosed CBL’s financial results for the second

quarter of 2011 and described the Company’s ongoing financing and refinancing activities, as well

as their impact on operations and cash flows. In discussing the Company’s secured lines of credit,

defendants described financial covenants contained in the agreements to those lines of credit,

including the maintenance of certain financial coverage ratios, minimum net worth requirements and

limitations on cash flow distributions. In that context, defendants specifically represented to

investors that “[t]he Company was in compliance with all covenants and restrictions at June 30,

2011.”

28. In the August 9, 2011 quarterly report, defendants also described the Company’s

activities in financing and refinancing various mortgages on operating properties, including two

separate ten-year, non-recourse mortgage loans the Company obtained in the second quarter of 2011.

29. On November 2, 2011, CBL convened a conference call at which it announced its

financial results for the third quarter of 2011. During that conference call, Foy boasted to investors

that the Company’s “coverage ratios [were] very sound,” it was “experiencing very strong demand

from institutional lenders and banks for refinancing opportunities,” and it was “getting new quotes

on upcoming maturities from a variety of lending sources.” Foy also reported that the Company had

“recently completed the extension and/or modification of [its] three major credit facilities, with total

aggregate capacity of $1.15 billion,” and had “reduced [its] borrowing cost by more than 250 basis

points with the removal of the LIBOR floor on all three facilities and a reduction in the borrowing

spreads.”

30. On November 9, 2011, CBL filed with the SEC another quarterly report on Form

10-Q. The quarterly report was signed by Foy and contained Sarbanes-Oxley certifications signed

by Lebovitz and Foy. These certifications provided, among other things, that the undersigned had

reviewed the Form 10-Q and that it contained no materially untrue statements or omissions; fairly

represented in all material respects the financial condition of CBL; was accurate in all material

respects; and disclosed any material changes to the Company’s internal control over financial

reporting.

31. The November 9, 2011 quarterly report disclosed CBL’s financial results for the third


as their impact on operations and cash flows. In discussing the Company’s secured lines of credit,

defendants described financial covenants contained in the agreements to those lines of credit,



investors that “[t]he Company was in compliance with all covenants and restrictions at September

30, 2011.”

32. In the November 9, 2011 quarterly report, defendants also described the Company’s

activities in financing and refinancing various mortgages on operating properties, including the

Company’s closing on two ten-year, non-recourse mortgage loans.

33. On February 9, 2012, CBL convened a conference call to discuss its financial results

for the fourth quarter of 2011 and the full year ended December 31, 2011. During that conference

call, Foy reported that CBL had “completed approximately $380 million in financings at very

attractive rates,” including loans with “a mix of lenders, including [commercial mortgage-backed

securities (‘CMBS’)], banks, and life companies, demonstrating our broad access to capital.” Foy

also stated that the Company was “in the market receiving bids on the majority of” its “mortgage

maturities remaining in 2012,” with “interest from CMBS Lenders, as well as institutions and

banks,” and was “hoping to achieve improvement [in] rates on the new loans.” Foy also represented

that the Company’s “coverage ratios remain[ed] very sound.”

34. On February 29, 2012, the Company filed with the SEC its annual report on Form

10-K for the period ended December 31, 2011. The annual report was signed by Lebovitz and Foy

and contained Sarbanes-Oxley certifications signed by them. These certifications provided, among

other things, that the undersigned had reviewed the Form 10-K and it contained no materially untrue

statements or omissions; fairly represented in all material respects the financial condition of CBL;

was accurate in all material respects; and disclosed any material changes to the Company’s internal

control over financial reporting.

35. The 2011 annual report disclosed the Company’s financial results for the entire year

of 2011, with substantial portions devoted to the Company’s financing and refinancing activities.

36. The 2011 annual report represented to investors multiple times that “[t]he Company

believes that it was in compliance with all covenants and restrictions at December 31, 2011” and

that “we believe we were in compliance with all . . . covenants related to our credit facilities.” These

covenants included, among other things, the requirements that the Company’s Debt to Gross Asset

Value ratio, as defined in the agreements to the Company’s credit facilities, be less than 65%; that its

Interest Coverage ratio, as defined, be greater than 1.75; and that its Debt Service Coverage ratio, as

defined, be greater than 1.50. The annual report also incorporated by reference the Company’s Code

of Ethics, as Exhibit 14.1, and incorporated by reference the discussion of the Code of Ethics from

the 2012 proxy statement, which discussion is described below.

37. On March 12, 2012, Lebovitz gave a presentation at the Citi Global Property CEO

Conference. In his remarks at that conference, Lebovitz emphasized the Company’s financing

activities. In particular, Lebovitz reported that during 2011, CBL had been “able to close more than

$1.2 billion in financing activity at favorable rates”; that the Company had “retired several . . loans

early to take advantage of the current favorable interest rate on [its] lines of credit”; and that it was

“currently in the market with bids for replacement loans and [it was] encouraged by the recent

strengthening of the CMBS market and anticipate[d] closing new loans later this year and generating

excess proceeds over the prior loan amount.”

38. On March 26, 2012, the Company filed with the SEC its Definitive Proxy Statement

for its 2012 annual meeting of stockholders. The 2012 proxy statement was signed by Lebovitz.

The 2012 proxy statement disclosed that CBL’s “Board has adopted a Second Amended and

Restated Code of Business Conduct and Ethics (the ‘Code of Business Conduct’) that applies to all

directors, officers and employees, including the Company's principal executive officer, principal

financial officer and principal accounting officer,” told investors where to find a copy of it, and

incorporated it by reference. It also explained that:

The purpose of the Code of Business Conduct is to provide a codification ofstandards that is reasonably designed to deter wrongdoing and to promoteaccountability for and adherence to the standards of the Code, including honest andethical conduct; the ethical handling of actual or apparent conflicts of interest

between personal and professional relationships; full, fair, accurate, timely andunderstandable disclosure in the Company's filings with the SEC and in otherpublic communications by the Company; and compliance with all applicable rulesand regulations that apply to the Company and to its directors, officers andemployees.

39. On May 1, 2012, the Company convened a conference call to discuss its financial

results for the first quarter of 2012. Foy reported that at that point in 2012, the Company had

“completed approximately $195 million in financings at a weighted average rate of 5.09%” in a pair

of new ten-year, non-recourse mortgage loans that enabled the Company to “achieve[] significant

interest rate savings as the previous loans carried an interest rate of 6.51%.” Foy also reported that

the Company had “term sheets for all but one of the remaining 2012 maturities” and that the

Company had “received interest from CMBS lenders as well as institutions and banks” and

“anticipate[d] completing these financings within the next several months.” Foy then represented

that the Company’s “coverage ratios remain very sound.”

40. On May 10, 2012, CBL filed with the SEC a quarterly report on Form 10-Q. The

quarterly report was signed by Foy and contained Sarbanes-Oxley certifications signed by Lebovitz

and Foy. These certifications provided, among other things, that the undersigned had reviewed the

Form 10-Q and it contained no materially untrue statements or omissions; fairly represented in all

material respects the financial condition of CBL; was accurate in all material respects; and disclosed

any material changes to the Company’s internal control over financial reporting.

41. The May 10, 2012 quarterly report disclosed CBL’s financial results for the first


as their impact on operations and cash flows. In discussing the Company’s three secured lines of

credit, defendants described financial covenants contained in the agreements to those lines of credit,



investors that “[t]he Company believes it was in compliance with all covenants and restrictions at

March 31, 2012.”

42. In the May 10, 2012 quarterly report, defendants also described the Company’s

activities in financing and refinancing various mortgages on operating properties, including one new

CMBS loan obtained with respect to an operating property, another property as to which the

Company’s loan had been placed in default and 15 operating properties as to which the Company

had retired its secured loans with borrowings from its secured credit facilities.

43. On June 12, 2012, Lebovitz participated in a presentation at REITWeek: NAREIT’s

Investor Forum. In his introductory remarks, Lebovitz stressed that the Company had just

refinanced four additional loans, with new ten-year loans raising total proceeds of more than $64

million at a weighted average interest rate of 4.85%, compared with the previous weighted average

interest rate of 6.62%.

44. On July 27, 2012, CBL convened a conference call to discuss its financial results for

the second quarter of 2012. Foy disclosed that, since the first quarter of 2012, the Company had

“been actively placing new mortgages on [the properties for which it had previously retired 2012

maturities], and reducing the corresponding balance on [its] lines of credit. Year to date, [CBL]

ha[d] closed over $456 million in loans at a weighted average rate of 4.97% and a term of 10 years.”

Foy further represented that the Company’s “financial covenant ratios remained very sound.”

45. On August 9, 2012, CBL filed with the SEC a quarterly report on Form 10-Q. The

quarterly report was signed by Foy and contained Sarbanes-Oxley certifications signed by Lebovitz

and Foy. These certifications provided, among other things, that the undersigned had reviewed the

Form 10-Q and it contained no materially untrue statements or omissions; fairly represented in all

material respects the financial condition of CBL; was accurate in all material respects; and disclosed

any material changes to the Company’s internal control over financial reporting.








June 30, 2012.”

47. In the August 9, 2012 quarterly report, defendants also described the Company’s

activities in financing and refinancing various mortgages on operating properties during the second

quarter of 2012, including six new property-specific loans and one extension and modification of an

existing loan.

48. On November 7, 2012, the Company convened a conference call at which it discussed

its financial results for the third quarter of 2012. Mitchell (who had recently taken over from Foy as

the Company’s CFO) reported that the Company’s priority was to “ensure that we have multiple

capital sources available to us,” in particular by “working to put our balance sheet in a position to

achieve an investment grade rating, providing CBL with access to a broader market of corporate

securities.” Mitchell stated that the Company was “pleased with the positive response and support

[it] ha[d] received from [its] banks” and that, as a “first step,” it had already “received fully executed

lender commitments to extend and modify [its] two largest credit facilities.” Mitchell also informed

investors that all of the Company’s property-level mortgage maturities for 2012 had been

“successfully addressed.” Finally, Mitchell represented that the Company’s “financial covenant

ratios remain very sound.”

49. Also in the November 7, 2012 conference call, Lebovitz answered an analyst’s

question about the “dramatic” shift in CBL’s financing strategy from primarily focusing on property-

specific secured non-recourse debt, to instead seeking investment-grade credit ratings by focusing on

increasing its pool of unencumbered properties. Lebovitz explained that this financing strategy was

“a really exciting change for us” that would “allow CBL to be a stronger company financially for a

long time into the future.”

50. On November 9, 2012, the Company filed with the SEC a quarterly report on Form

10-Q. The quarterly report was signed by Mitchell and contained Sarbanes-Oxley certifications

signed by Lebovitz and Mitchell. These certifications provided, among other things, that the

undersigned had reviewed the Form 10-Q and it contained no materially untrue statements or

omissions; fairly represented in all material respects the financial condition of CBL; was accurate in

all material respects; and disclosed any material changes to the Company’s internal control over

financial reporting.








September 30, 2012.”


activities in financing and refinancing various mortgages on operating properties during the third

quarter of 2012, including the retirement of three loans with borrowings from the Company’s

secured credit facilities.

53. On February 6, 2013, CBL convened a conference call to discuss its financial results

for the fourth quarter of 2012. During the call, Lebovitz asserted that “2012 was a successful year

for CBL on all fronts with major new strategic financing initiatives, attractive acquisitions, a

growing pipeline of redevelopments, expansions and new development opportunities, and

accelerating operational strength.” Lebovitz also reported that improvement in the Company’s funds

from operations was driven in significant part by “interest savings generated from loan repayments,

refinancings and improvements in [its] line of credit spreads.”

54. Mitchell then reiterated the Company’s new financing strategy and reported that, as

part of the process of developing an “investment grade” balance sheet, the Company was “paying off

property specific loans as they mature to increase the size of [its] unencumbered [net operating

income (‘NOI’)] and gross asset value. While we believe most of our key financial ratios would

already meet the investment grade criteria, due to the laddering of our maturities, achieving the

necessary ratio of encumbered NOI to secure an investment grade rating will take us 18 to 24

months.” Mitchell also stated that the Company had, during the fourth quarter of 2012, “closed on

the extension and modification of [its] two largest credit facilities,” which were converted from

secured to unsecured and expanded by $155 million to an aggregate capacity of $1.2 billion. She

also reported that the Company had closed one new loan secured by an operating property that was

owned in a joint venture and retired two loans secured by wholly owned operating properties using

funds from its lines of credit. Finally, Mitchell again represented that the Company’s “financial

covenant ratios remain very sound.”

55. On March 1, 2013, the Company filed with the SEC its annual report on Form 10-K

for the year ended December 31, 2012. The annual report was signed by Lebovitz and Mitchell and

contained Sarbanes-Oxley certifications signed by them. These certifications provided, among other

things, that the undersigned had reviewed the Form 10-K and it contained no materially untrue




56. The 2012 annual report stated that “[t]he Company believes that it was in compliance

with all covenants and restrictions at December 31, 2012” and that “[w]e believe we were in

compliance with all covenants and restrictions at December 31, 2012.” These covenants included,

among other things, the requirements that the Company’s debt to total asset value ratio, as defined in

the agreements to the Company’s credit facilities, be less than 60%; that its ratio of unencumbered

asset value to unsecured indebtedness, as defined, be greater than 1.60; that its ratio of

unencumbered net operating income to unsecured interest expense, as defined, be greater than 1.75;

and that its ratio of EBITDA to fixed charges (debt service), as defined, be greater than 1.50. The

2012 annual report also incorporated by reference the discussion of the Code of Ethics contained in

the proxy statement for the 2013 annual meeting of stockholders, which discussion is described

below.

57. Appended to the 2012 annual report were copies of the latest credit agreements for

the Company’s two largest credit facilities, which Mitchell had explained during the February 6

conference call had been extended and modified to delay the maturity dates and increase the

Company’s credit lines.

58. First, attached as Exhibits 10.23.1 and 10.23.2 to the Company’s 2012 annual report

were copies of the Third Amended and Restated Credit Agreement by and among the Operating

Partnership and the Company and Wells Fargo Bank, National Association, et al., dated November

13, 2012, and the First Amendment to that agreement, dated January 31, 2013 (as so amended, the

“Third Credit Agreement”).

59. Among other things, the Third Credit Agreement required the Company to comply

with a number of affirmative and negative covenants, including maintaining certain financial ratios,

and to provide detailed information to the administrative agent and lenders under that agreement.

The Third Credit Agreement also required that the Operating Partnership deliver its quarterly and

annual financial statements (as well as those of CBL) to the administrative agent for distribution to

each of the lenders, together with:

(a) a certificate substantially in the form of Exhibit K (a “Compliance Certificate”)executed on behalf of the Borrower [i.e., the Operating Partnership] by any officer ofthe Parent [i.e., CBL] having a position of at least a senior vice-president or theParent’s vice president of accounting (i) setting forth as of the end of such quarterlyaccounting period or fiscal year, as the case may be, the calculations required toestablish whether the Parent was in compliance with the covenants contained inSection 10.1. [i.e., the financial covenants]; and (ii) stating that to the best of suchofficer’s knowledge, no Default or Event of Default exists, or, if such is not the case,specifying such Default or Event of Default and its nature, when it occurred and thesteps being taken by the Parent with respect to such event, condition or failure, (b) astatement of cash flow for such quarterly accounting period or fiscal year, (c) a reportof newly acquired Properties for such quarterly accounting period or fiscal year,including the Net Operating Income, cost and Mortgage Indebtedness, if any, of eachsuch Property, and (d) a schedule of the Properties comprising UnencumberedAsset Value detailing trailing twelve (12) month Net Operating Income, GAAPundepreciated cost basis, Occupancy Rate and a calculation of UnencumberedAsset Value for such quarterly accounting period or fiscal year.

60. Given the importance of that information to the administrative agent and lenders’

willingness to extend credit on the terms reflected in the Third Credit Agreement, the Operating

Partnership specifically represented that:

All written information, reports and other papers and data furnished to theAdministrative Agent or any Lender by, on behalf of, or at the direction of, theParent [i.e., CBL], any Loan Party or any other Subsidiary were, at the time the samewere so furnished, complete and correct in all material respects, to the extentnecessary to give the recipient a true and accurate knowledge of the subject matter,or, in the case of financial statements, present fairly, in accordance with GAAPconsistently applied throughout the periods involved, the financial position of thePersons involved as at the date thereof and the results of operations for such periods.No fact is known to the Parent or any Loan Party which has had, or may in the futurehave (so far as any Loan Party can reasonably foresee), a Material Adverse Effectwhich has not been set forth in the financial statements referred to in Section 7.1.(k)or in such information, reports or other papers or data or otherwise disclosed inwriting to the Administrative Agent and the Lenders prior to the Effective Date. Nodocument furnished or written statement made to the Administrative Agent or any

Lender in connection with the negotiation, preparation or execution of, orpursuant to, this Agreement or any of the other Loan Documents contains or willcontain any untrue statement of a fact material to the creditworthiness of Parent,any Loan Party or any other Subsidiary or omits or will omit to state a materialfact necessary in order to make the statements contained therein not misleading.

61. In addition, the Third Credit Agreement provided that Holdings I, as general partner

for the Operating Partnership, could be held personally liable for fraud or willful misrepresentation

in connection with the Third Credit Agreement, and required that CBL execute a separate guaranty

of all of Holdings I’s obligations. Thus, if the Operating Partnership were to fraudulently or

willfully misrepresent its financial condition to the administrative agent and lenders, CBL would be

liable not only indirectly through the Operating Partnership but also directly as a guarantor.

62. Second, attached as Exhibits 10.24.1 and 10.24.2 were copies of the Eighth Amended

and Restated Credit Agreement by and among the Operating Partnership, the Company and Wells

Fargo, Bank, National Association, et al., dated November 13, 2012, and the First Amendment to

that agreement, dated January 31, 2013 (as so amended, the “Eighth Credit Agreement”).

63. The Eighth Credit Agreement was similar in many respects to the Third Credit

Agreement. Like the Third Credit Agreement, the Eighth Credit Agreement required the Company

to comply with a number of affirmative and negative covenants, including maintaining certain

financial ratios, and to provide detailed information to the administrative agent and lenders under

that agreement. The Eighth Credit Agreement also required that the Operating Partnership deliver its

quarterly and annual financial statements (as well as those of CBL) to the administrative agent for

distribution to each of the lenders, together with:

(a) a certificate substantially in the form of Exhibit K (a “Compliance Certificate”)executed on behalf of the Borrower by any officer of the Parent having a position ofat least a senior vice-president or the Parent’s vice president of accounting (i) settingforth as of the end of such quarterly accounting period or fiscal year, as the case maybe, the calculations required to establish whether the Parent was in compliance withthe covenants contained in Section 10.1.; and (ii) stating that to the best of suchofficer’s knowledge, no Default or Event of Default exists, or, if such is not the case,specifying such Default or Event of Default and its nature, when it occurred and thesteps being taken by the Parent with respect to such event, condition or failure, (b) astatement of cash flow for such quarterly accounting period or fiscal year, (c) a reportof newly acquired Properties for such quarterly accounting period or fiscal year,including the Net Operating Income, cost and Mortgage Indebtedness, if any, of eachsuch Property, and (d) a schedule of the Properties comprising UnencumberedAsset Value detailing trailing twelve (12) month Net Operating Income, GAAPundepreciated cost basis, Occupancy Rate and a calculation of UnencumberedAsset Value for such quarterly accounting period or fiscal year.

64. Given the importance of that information to the administrative agent and lenders’

willingness to extend credit on the terms reflected in the Eighth Credit Agreement, the Operating

Partnership specifically represented that:

All written information, reports and other papers and data furnished to theAdministrative Agent or any Lender by, on behalf of, or at the direction of, theParent, any Loan Party or any other Subsidiary were, at the time the same were sofurnished, complete and correct in all material respects, to the extent necessary togive the recipient a true and accurate knowledge of the subject matter, or, in the caseof financial statements, present fairly, in accordance with GAAP consistently appliedthroughout the periods involved, the financial position of the Persons involved as atthe date thereof and the results of operations for such periods. No fact is known tothe Parent or any Loan Party which has had, or may in the future have (so far as anyLoan Party can reasonably foresee), a Material Adverse Effect which has not been setforth in the financial statements referred to in Section 7.1.(k) or in such information,reports or other papers or data or otherwise disclosed in writing to the AdministrativeAgent and the Lenders prior to the Effective Date. No document furnished orwritten statement made to the Administrative Agent or any Lender in connectionwith the negotiation, preparation or execution of, or pursuant to, this Agreementor any of the other Loan Documents contains or will contain any untrue statementof a fact material to the creditworthiness of Parent, any Loan Party or any otherSubsidiary or omits or will omit to state a material fact necessary in order to makethe statements contained therein not misleading.

65. In addition, the Eighth Credit Agreement provided that Holdings I, as general partner

for the Operating Partnership, could be held personally liable for fraud or willful misrepresentation

in connection with the Eighth Credit Agreement, and required that CBL execute a separate guaranty

of all of Holdings I’s obligations. Thus, if the Operating Partnership were to fraudulently or

willfully misrepresent its financial condition to the administrative agent and lenders, CBL would be

liable not only indirectly through the Operating Partnership but also directly as a guarantor.








The purpose of the Code of Business Conduct is to provide a codification ofstandards that is reasonably designed to deter wrongdoing and to promoteaccountability for and adherence to the standards of the Code, including honest andethical conduct; the ethical handling of actual or apparent conflicts of interest

between personal and professional relationships; full, fair, accurate, timely andunderstandable disclosure in the Company's filings with the SEC and in otherpublic communications by the Company; and compliance with all applicable rulesand regulations that apply to the Company and to its directors, officers andemployees.

67. On April 30, 2013, CBL convened a conference call to discuss its financial results for

the first quarter of 2013. In that conference call, Mitchell reported that the Company was “making

strides towards establishing a balance between secured and unsecured debt,” and that in February

2013, the Company had “closed on the extension and modification of a $105 million line of credit,

converting it to a $100 million unsecured line of credit and a fully funded $50 million unsecured

term loan.” Mitchell informed investors that the Company was “utilizing [its] combined $1.3 billion

of credit facilities to pay off maturing loans.” Mitchell also reported that the Company would

continue to obtain property-level financing for properties owned in joint ventures and reported that

the Company had closed on two such loans in the first quarter, while it had retired two loans on

wholly owned properties in the quarter and one following the end of the quarter Finally, Mitchell

represented that the Company’s “financial covenant ratios remain very sound.”

68. On May 10, 2013, the Company filed with the SEC its quarterly report on Form 10-Q.

The quarterly report was signed by Mitchell and contained Sarbanes-Oxley certifications signed by

Lebovitz and Mitchell. These certifications provided, among other things, that the undersigned had

reviewed the Form 10-Q and it contained no materially untrue statements or omissions; fairly



reporting.

69. In the May 10, 2013 quarterly report, defendants specifically represented to investors

that “[t]he Company believes it was in compliance with all covenants and restrictions at March 31,

2013.”

70. On August 1, 2013, the Company convened a conference call to discuss its financial

results for the second quarter of 2013. During this call, Mitchell disclosed the “significant

progress . . . on [CBL’s] balance sheet strategies” and that the Company had “received two

investment-grade ratings” from Moody’s Investors Services and Fitch such that the Company was

“now in a position to access the public debt markets.” Mitchell also reported that, earlier that week,

the Company had closed on a $400 million unsecured term loan and that the Company had

substantially completed the payoff of its 2013 loans, as well as retired two loans that were set to

mature in later years. Finally, Mitchell represented that the Company’s “financial covenants remain

very sound.”

71. Also during this conference call, Lebovitz stressed that the Company had “made

significant improvements to [its] balance sheet and [was] continuing to execute [its] plan to create a

more balanced financing structure.”

72. On August 8, 2013, the Company filed with the SEC its quarterly report on Form









as their impact on operations and cash flows. In discussing the Company’s three unsecured lines of

credit, defendants described the financial covenants contained in the agreements to those lines of

credit. In that context, defendants specifically represented to investors that “[t]he Company believes

that it was in compliance with all covenants and restrictions at June 30, 2013.”

74. On November 6, 2013, the Company convened a conference call to discuss its

financial results for the third quarter of 2013. Mitchell informed investors that, as the Company

worked towards executing a bond offering later in 2013 or in early 2014, it was trying to “continue

to improve [its] credit metrics.” Mitchell also reported that the Company had closed on a $400

million unsecured term loan at a “favorable” interest rate and had used the proceeds to pay down

outstanding balances on its lines of credit. Under that term loan agreement, the terms of which were

disclosed to investors in August 2013, the Operating Partnership was required to provide to the

administrative agent for distribution to the lenders its financial statements (and those of CBL), as

well as:

(a) a certificate substantially in the form of Exhibit I (a “Compliance Certificate”)executed on behalf of the Borrower by any officer of the Parent having a position ofat least a senior vice-president or the Parent’s vice president of accounting (i) settingforth as of the end of such quarterly accounting period or fiscal year, as the case maybe, the calculations required to establish whether the Parent was in compliance withthe covenants contained in Section 10.1.; and (ii) stating that to the best of suchofficer’s knowledge, no Default or Event of Default exists, or, if such is not the case,specifying such Default or Event of Default and its nature, when it occurred and thesteps being taken by the Parent with respect to such event, condition or failure, (b) astatement of cash flow for such quarterly accounting period or fiscal year, (c) a reportof newly acquired Properties for such quarterly accounting period or fiscal year,including the Net Operating Income, cost and Mortgage Indebtedness, if any, of eachsuch Property, and (d) a schedule of the Properties comprising UnencumberedAsset Value detailing trailing twelve (12) month Net Operating Income, GAAPundepreciated cost basis, Occupancy Rate and a calculation of UnencumberedAsset Value for such quarterly accounting period or fiscal year.

75. Also under the term loan agreement, the Operating Partnership again represented and

warranted that:

All written information, reports and other papers and data furnished to theAdministrative Agent or any Lender by, on behalf of, or at the direction of, theParent, any Loan Party or any other Subsidiary were, at the time the same were sofurnished, complete and correct in all material respects, to the extent necessary togive the recipient a true and accurate knowledge of the subject matter, or, in the caseof financial statements, present fairly, in accordance with GAAP consistently appliedthroughout the periods involved, the financial position of the Persons involved as atthe date thereof and the results of operations for such periods. No fact is known tothe Parent or any Loan Party which has had, or may in the future have (so far as anyLoan Party can reasonably foresee), a Material Adverse Effect which has not been setforth in the financial statements referred to in Section 7.1.(k) or in such information,reports or other papers or data or otherwise disclosed in writing to the AdministrativeAgent and the Lenders prior to the Effective Date. No document furnished orwritten statement made to the Administrative Agent or any Lender in connectionwith the negotiation, preparation or execution of, or pursuant to, this Agreementor any of the other Loan Documents contains or will contain any untrue statementof a fact material to the creditworthiness of Parent, any Loan Party or any otherSubsidiary or omits or will omit to state a material fact necessary in order to makethe statements contained therein not misleading.

76. In addition, the term loan agreement provided that Holdings I, as general partner for

the Operating Partnership, could be held personally liable for fraud or willful misrepresentation in

connection with the term loan agreement, and required that CBL execute a separate guaranty of all of

Holdings I’s obligations. Thus, if the Operating Partnership were to fraudulently or willfully

misrepresent its financial condition to the administrative agent and lenders, CBL would be liable not

only indirectly through the Operating Partnership but also directly as a guarantor.

77. On November 12, 2013, the Company filed with the SEC its quarterly report on Form







78. The November 12, 2013 quarterly report disclosed CBL’s financial results for the

third quarter of 2013 and described the Company’s ongoing financing and refinancing activities, as

well as their impact on operations and cash flows. In discussing the Company’s three unsecured

lines of credit and its unsecured term loans, defendants described the financial covenants contained

in the agreements to those sources of financing. In that context, defendants specifically represented

to investors that “[t]he Company believes that it was in compliance with all covenants and

restrictions at September 30, 2013.”



quarter of 2013, including the retirement of two loans with borrowings from the Company’s credit

facilities, a closing on one property-specific loan for a property held through a joint venture after the

end of the quarter, and one additional mortgage on which the lender had sent a formal notice of

default and initiated foreclosure proceedings.

80. On February 5, 2014, the Company convened a conference call to discuss its financial

results for the fourth quarter of 2013. Lebovitz began the conference call by stressing the

Company’s “progress in 2013 on improving our balance sheet and achieving our goals ahead of

schedule.” Mitchell elaborated that “2013 was a transformational year for the balance sheet, and our

hard work yielded many impressive results,” citing the Company’s closing on $130 million of new

secured loans for joint venture properties and the new $400 million five-year unsecured term loan, as

well as the Company’s having “ended the year with a successful $450 million inaugural bond

issuance with more than 70 investors participating.” Mitchell represented that the Company’s

“financial covenants remain very sound” and that its “bond covenants remain well in excess of the

maximum required.”

81. On March 3, 2014, CBL filed with the SEC its annual report on Form 10-K. The

annual report was signed by Lebovitz and Mitchell and contained Sarbanes-Oxley certifications

signed by them. These certifications provided, among other things, that the undersigned had

reviewed the Form 10-K and it contained no materially untrue statements or omissions; fairly



reporting.

82. The 2013 annual report represented to investors that “[t]he Company believes that it

was in compliance with all covenants and restrictions at December 31, 2013” and that “we believe

we were in compliance with all covenants and restrictions at December 31, 2013,” with respect to

the Company’s unsecured lines of credit, the notes and the unsecured term loans. These covenants

included, among other things, the requirements that the Company’s debt to total asset value ratio, as

defined in the agreements to the Company’s credit facilities, be less than 60%; that its ratio of

unencumbered asset value to unsecured indebtedness, as defined, be greater than 1.60; that its ratio

of unencumbered net operating income to unsecured interest expense, as defined, be greater than

1.75; and that its ratio of EBITDA to fixed charges (debt service), as defined, be greater than 1.50.

83. Regarding the notes that had been issued in November 2013, the annual report

informed investors that CBL was a limited guarantor for “losses suffered solely by reason of fraud or

willful misrepresentation by the Operating Partnership or its affiliates” and confirmed that the

Company also provided a limited guarantee of the Operating Partnership’s obligations with respect

to its unsecured credit facilities and two unsecured term loans.

84. The 2013 annual report disclosed to investors the risk that the “covenants in [CBL’s]

credit facilities might adversely affect [it],” but stated that “[c]ompliance with each of these ratios

[specified in the credit facilities] is dependent upon [CBL’s] financial performance” rather than on

the extent to which CBL would misrepresent its financial results to its lenders. The Company also

stated that “[i]f any future failure to comply with one or more of these covenants resulted in the loss

of these credit facilities and we were unable to obtain suitable replacement financing, such loss could

have a material, adverse impact on our financial position and results of operations.”

85. In addition, confirming the importance of the Company’s financing activities, page 7

of the 2013 annual report contained the following discussion of those activities:

Financing and Capital Markets Activity

2013 was a transformational year as we achieved many of our financingobjectives and long-term goals ahead of schedule. Highlights of financing andcapital markets activity for the year ended December 31, 2013 include the following:

• Received investment grade ratings from Moody’s Investors Service(“Moody’s”) and Fitch Ratings (“Fitch”);

• Added the Operating Partnership as a public registrant and completed a$450.0 million 5.250% senior unsecured notes offering due in 2023 (the“Notes”);

• Initiated a $300.0 million at-the-market (“ATM”) equity program which,through the issuance of 8.4 million shares of common stock, generated$209.6 million in net proceeds;

• Redeemed all outstanding perpetual preferred joint venture units (“PJVunits”) of our joint venture, CW Joint Venture, LLC (“CWJV”) withWestfield Group (“Westfield”), which were originally issued in 2007 inconjunction with the acquisition of four malls, for $413.0 million;

• Converted our third credit facility from secured to unsecured with a capacityof $100.0 million;

• Closed on two unsecured term loans totaling $450.0 million and retired a$228.0 million unsecured term loan;

• Completed financing of $416.6 million on new and extended loans on eightProperties owned in joint ventures and retired over $290.0 million in wholly-owned property-specific loans; and

• Increased our quarterly dividend by 6.5% in the fourth quarter of 2013 to$0.245 per share from $0.23 per share.

86. A more detailed discussion of each of those financing activities was also provided

later in the 2013 annual report.

87. The 2013 annual report also incorporated by reference the discussion of the Code of

Ethics contained in the proxy statement for the 2014 annual meeting of stockholders, which

discussion is described below.

88. On March 4, 2014, a group of executives from CBL, including Lebovitz and Mitchell,

attended the Citi Global Property Conference. In his introductory remarks, Lebovitz stressed the

Company’s financing activities, including its “successful $450 million inaugural bond offering” and

its efforts to “increase the quality and quantity of [its] unencumbered asset pool by retiring

mortgages on a number of [its] higher-productivity centers,” including one recent early payoff of a

property-specific loan and another that the Company expected to execute later in the year. In

response to a question from an analyst about the impact of sales of certain properties with lower

loan-to-value ratios on the Company’s compliance with covenant ratios in its debt agreements,

Mitchell stated that the Company had “a good bit of room, but our goal is to continue to be within

the bond covenants and be able to issue more bonds, so we are quite aware of that,” and that “based

on the assets we’re looking to sell, we should be well within those covenants.”








The purpose of the Code of Business Conduct is to provide a codification ofstandards that is reasonably designed to deter wrongdoing and to promoteaccountability for and adherence to the standards of the Code, including honest andethical conduct; the ethical handling of actual or apparent conflicts of interestbetween personal and professional relationships; full, fair, accurate, timely andunderstandable disclosure in the Company's filings with the SEC and in otherpublic communications by the Company; and compliance with all applicable rulesand regulations that apply to the Company and to its directors, officers andemployees.

90. On April 11, 2014, the Company convened a conference call to provide a business

outlook and portfolio review. Describing the Company’s business strategy, Lebovitz stated that “the

strength and flexibility of our balance sheet and overall financials is an ongoing priority, and we will

build on the progress we have made in the past 18 months.” Mitchell then explained that, following

the Company’s inaugural bond offering, the Company was “attempting to further improv[e] [its]

credit metrics and build[] a high-quality unencumbered asset pool,” which would “continue to

reduce [its] cost of capital and provide [the Company] with more opportunities to access the capital

markets at the best possible time.” She also told investors that an illustration of the pro forma

impact to the Company’s credit and bond covenant metrics of various property dispositions that

Lebovitz had outlined earlier in the call showed that the Company’s “credits and bond metrics are

markedly strengthened through the disposition process, progressing CBL towards [its] goal of

achieving higher ratings.”

91. On April 29, 2014, the Company convened another conference call, this time to

discuss the Company’s financial results for the first quarter of 2014. Lebovitz reiterated the goals he

had articulated on April 11, 2014, including to “[m]aintain and enhance the strength and flexibility

of the balance sheet including growing the quality and size of the unencumbered assets pool and

further improving key financial metrics.” Mitchell reported that the Company was “pleased with the

progress we are making to enhance our financial metrics and provide further flexibility in our

balance sheet.” She reported that the Company had paid off one property-specific loan early and that

the foreclosure of another property had been completed. Mitchell then represented that the

Company’s “financial covenants remain sound” and that its “bond covenants are well in excess of

the minimum required and we expect continued improvement over time.”

92. On May 12, 2014, the Company filed with the SEC its latest quarterly report on Form










credit, its notes and its unsecured term loans, defendants described the financial covenants contained



restrictions at March 31, 2014.”

94. On July 30, 2014, the Company convened a conference call to discuss its financial

results for the second quarter of 2014. Mitchell reported on a few financing transactions that she

deemed “significant,” including a new loan secured by a property owned by a joint venture, a

property-specific loan that was anticipated to be retired using borrowing from the Company’s lines

of credit, and a loan that was placed into receivership. Mitchell represented that the Company’s

“financial covenants remain sound” and that its “bond covenants are well in excess of the minimum

required and we expect continued improvements over time.”

95. On August 11, 2014, CBL filed with the SEC its quarterly report on Form 10-Q for

the second quarter of 2014. The quarterly report was signed by Mitchell and contained Sarbanes-

Oxley certifications signed by Lebovitz and Mitchell. These certifications provided, among other

things, that the undersigned had reviewed the Form 10-Q and it contained no materially untrue










restrictions at June 30, 2014.”

97. On October 30, 2014, the Company convened a conference call to discuss its financial

results for the third quarter of 2014. Mitchell reported that the Company had completed its second

issuance of unsecured notes, raising $300 million. Mitchell also disclosed that the Company had

repaid one $113 million property-specific loan and conveyed two properties to lenders in lieu of

foreclosure. Further, Mitchell represented that the Company’s “financial [covenants] are sound” and

that its “bond covenants are well in excess of the minimum required and we expect continued

improvements over time.”








99. The November 10, 2014 quarterly report disclosed CBL’s financial results for the

third quarter of 2014 and described the Company’s ongoing financing and refinancing activities, as

well as their impact on operations and cash flows. In discussing the Company’s three unsecured

lines of credit, its notes and its unsecured term loans, defendants described the financial covenants

contained in the agreements to those sources of financing. In that context, defendants specifically

represented to investors that “[t]he Company believes that it was in compliance with all covenants

and restrictions at September 30, 2014.”



quarter of 2014, including the retirement of one property-specific loan with borrowings from the

Company’s credit facilities and closings on three property-specific loans for properties held through

joint ventures.

101. On February 4, 2015, the Company convened a conference call at which it discussed

its financial results for the fourth quarter of 2014. Mitchell reported the Company’s “balance sheet

achievements,” including that the Company had retired three property-specific loans totaling $165

million in the fourth quarter and conveyed one property to a lender in lieu of foreclosure. Mitchell

also indicated that the Company planned to unencumber “high-quality” properties from $465 million

in loans using the Company’s lines of credit and then potentially convert to long-term fixed-rate

unsecured debt with a new bond issuance. In addition, Mitchell stated that the Company had used

the $300 million raised through its bond issuance to pay down the balances on its credit lines, giving

the Company “tremendous dry powder to execute our plan to convert secured debt to unsecured

borrowings.” Finally, Mitchell again represented that the Company’s “financial covenants remain

strong” and that the “bond covenants are well in excess of the minimum required and we expect

continued improvement over time.”

102. On March 2, 2015, CBL filed with the SEC its annual report on Form 10-K. The

annual report was signed by Lebovitz and Mitchell and contained Sarbanes-Oxley certifications

signed by them. These certifications provided, among other things, that the undersigned had

reviewed the Form 10-K and it contained no materially untrue statements or omissions; fairly



reporting.


was in compliance with all covenants and restrictions at December 31, 2014” and that “we believe

we were in compliance with all covenants and restrictions at December 31, 2014” with respect to the

Company’s unsecured lines of credit, the notes and the unsecured term loans. These covenants






104. Regarding the notes that had been issued in November 2013 and October 2014, the

annual report informed investors that CBL was a limited guarantor for “losses suffered solely by

reason of fraud or willful misrepresentations by the Operating Partnership or its affiliates” and

confirmed that the Company also provided a limited guarantee of the Operating Partnership’s

obligations with respect to its unsecured credit facilities and two unsecured term loans.

105. In addition, confirming the importance of the Company’s financing activities, page 9

of the 2014 annual report contained the following discussion of those activities:


We continue to progress in our strategy to build a high-quality unencumberedpool of Properties in addition to balancing our leverage structure. Highlights offinancing and capital markets activity for the year ended December 31, 2014 includethe following:

• completed a $300.0 million offering of 2024 Notes (as defined below) via ourOperating Partnership;

• retired four loans with an aggregate principal balance of $285.9 million usingborrowings from our credit facilities;

• recognized gain on extinguishment of debt of $89.4 million related to thetransfer of three Non-core Malls to their respective lenders in settlement of$164.0 million of non-recourse debt;

• closed on a $126.0 million loan secured by our Coastal Grand – MyrtleBeach 50/50 joint venture. The 10-year non-recourse loan bears interest at4.09% and was used to retire the existing $75.2 million loan, which boreinterest at 5.09% and was scheduled to mature in October 2014;

• obtained permanent financing for The Outlet Shoppes of the Bluegrassthrough a 10-year $77.5 million non-recourse loan, of which the Company’sshare is $50.4 million, which bears interest at a fixed-rate of 4.045% andreplaces a $47.9 million variable-rate construction loan; and

• increased our quarterly dividend by 8.2% in the fourth quarter of 2014 to$0.265 per share from $0.245 per share.

The Operating Partnership issued $450 million of senior unsecured notes inNovember 2013 that bear interest at 5.25% payable semiannually beginning June 1,2014 and mature on December 1, 2013 (the “2023 Notes”). In October 2014, theOperating Partnership issued $300 million of senior unsecured notes that bearinterest at 4.60% and mature on October 15, 2024 (the “2024 Notes” and,collectively with the 2023 Notes, the “Notes”). See Note 6 to the consolidatedfinancial statements for further information.












108. On April 29, 2015, the Company convened a conference call to discuss its financial

results for the first quarter of 2015. During the conference call, Mitchell emphasized that “one of

our strategic priorities is to improve our balance sheet and lower our overall cost of capital.”

Mitchell also advised investors that the Company planned to repay approximately $460 million of

property-specific secured loans in the second and third quarters, first utilizing the Company’s

unsecured lines of credit and then reducing the lines through an additional unsecured bond offering.

Mitchell stressed that the availability on the Company’s lines of credit gave it “tremendous

flexibility to execute our plan to convert secured debt to unsecured borrowings.” Finally, Mitchell

represented that the Company’s “financial covenants remain strong.”

109. On May 11, 2015, CBL filed with the SEC a quarterly report on Form 10-Q. The

quarterly report was signed by Mitchell and contained Sarbanes-Oxley certifications signed by





reporting.







restrictions at March 31, 2015.”

111. In the May 11, 2015 quarterly report, defendants also described the Company’s

activities in financing and refinancing various mortgages on operating properties during the first

quarter of 2015, including the retirement of one property-specific loan with borrowings from the

Company’s credit facilities.

112. On July 30, 2015, the Company convened a conference call to discuss its financial

results for the second quarter of 2015. On this call, Mitchell reported that the Company “continue[d]

to make solid progress in the transformation of [its] balance sheet. Since our last call, we have

retired five secured loans totaling over $370 million using availability under our lines of credit.”

Mitchell also discussed plans to retire two property-specific loans with borrowings from lines of

credit, to then be replaced by another bond issuance, and to refinance joint-venture properties with

maturing loans. Finally, Mitchell represented that “[a]ll financial covenants are healthy.”

113. On August 10, 2015, the Company filed with the SEC its quarterly report on Form













restrictions at June 30, 2015.” The quarterly report also reiterated CBL’s obligations as a limited

guarantor of the notes issued in November 2013 and October 2014 for losses solely by reason of

fraud or willful misrepresentation and similar guarantees as to the Operating Partnership’s

obligations under the unsecured credit facilities and two unsecured term loans.

115. On October 29, 2015, the Company convened another conference call, this time to

discuss its financial results for the third quarter of 2015. In his introductory remarks, Lebovitz

emphasized that the Company had “recently announced several major financing transactions,

including the extension of our unsecured credit facilities, a new term loan and two new secured loans

on joint venture properties.” Mitchell expanded on this, explaining that the Company had “closed on

two separate 10-year non-recourse loans on two properties owned in 50-50 joint ventures” and had

“recently announced the extension and modification of our three unsecured credit facilities with total

capacity of $1.1 billion,” as well as entering into a “new $350 million term loan” that was used to

“term out a portion of our line balance.” Mitchell also explained the Company’s decision to abandon

its bond issuance “due to unfavorable mid-day market volatility on the day we announced the deal.”

In a notable deviation from previous quarterly conference calls, however, Mitchell did not comment

on the strength or soundness of the Company’s compliance with its financial covenants.














restrictions at September 30, 2015.” The quarterly report also reiterated CBL’s obligations as a

limited guarantor of the notes issued in November 2013 and October 2014 for losses solely by

reason of fraud or willful misrepresentation and similar guarantees as to the Operating Partnership’s


118. The November 9, 2015 quarterly report also disclosed that, after the end of the third

quarter, the Company had closed on the extension and modification of its three unsecured credit

facilities and on one new unsecured term loan. The agreement for each of these arrangements was

attached to the quarterly report, and each contained substantially similar representations and

covenants as those set forth in the credit agreements and term loans discussed above. In particular,

in each agreement, the Operating Partnership promised to provide to the administrative agent for

distribution to the lenders various information, including “a schedule of the Properties comprising

Unencumbered Asset Value detailing trailing twelve (12) month Net Operating Income, GAAP

undepreciated cost basis, Occupancy Rate and a calculation of Unencumbered Asset Value for such

quarterly accounting period or fiscal year.” Likewise, the Operating Partnership again explicitly

represented that:

No document furnished or written statement made to the Administrative Agent orany Lender in connection with the negotiation, preparation or execution of, orpursuant to, this Agreement or any of the other Loan Documents contains or willcontain any untrue statement of a fact material to the creditworthiness of Parent, anyLoan Party or any other Subsidiary or omits or will omit to state a material factnecessary in order to make the statements contained therein not misleading.

119. In addition, the agreements provided that Holdings I, as general partner for the

Operating Partnership, could be held personally liable for fraud or willful misrepresentation in

connection with the agreements and required that CBL execute a separate guaranty of all of

Holdings I’s obligations. Thus, if the Operating Partnership were to fraudulently or willfully

misrepresent its financial condition to the administrative agent and lenders, CBL would be liable not

only indirectly through the Operating Partnership but also directly as a guarantor.

120. On February 4, 2016, the Company convened a conference call to discuss the

Company’s financial results for the fourth quarter of 2015. Mitchell noted that during 2015, the

Company had “completed more than $1.7 billion on financing activity, generating significant

improvements in our borrowing rates.” Mitchell also reported on various loans set to reach maturity

in 2016 that would be retired using the Company’s lines of credit, two loans as to which the

Company was negotiating modifications with the lenders and one loan as to which the Company was

waiting on a court to finalize a foreclosure.

121. On February 29, 2016, the Company filed with the SEC its annual report on Form

10-K. The annual report was signed by Lebovitz and Mitchell and contained Sarbanes-Oxley

certifications signed by them. These certifications provided, among other things, that the

undersigned had reviewed the Form 10-K and it contained no materially untrue statements or





was in compliance with all covenants and restrictions at December 31, 2015” with respect to the

Company’s unsecured lines of credit, the notes and the unsecured term loans. These covenants






123. Regarding the notes that had been issued in November 2013 and October 2014, the

annual report informed investors that CBL was a limited guarantor for “losses suffered solely by

reason of fraud or willful misrepresentations by the Operating Partnership or its affiliates” and

confirmed that the Company also provided a limited guarantee of the Operating Partnership’s

obligations with respect to its unsecured credit facilities and two unsecured term loans.

124. Confirming the importance of the Company’s financing activities, page 8 of the 2015

annual report contained the following discussion of those activities:


We continue to progress in our strategy to build a high-quality unencumberedpool of Properties in addition to balancing our leverage structure. Highlights offinancing and capital markets activity for the year ended December 31, 2015 includethe following:

• obtained an investment grade rating of BBB- from Standard & Poor’s RatingServices (“S&P”);

• extended and modified our three unsecured credit facilities totaling $1.1billion, reducing the borrowing spread to a rate of LIBOR plus 120 basispoints and also reducing the annual facility fee to 25 basis points, based uponour current credit ratings, which represents an aggregate 25 basis pointsimprovement over the rate on the previous facilities;

• closed on a new four-year (including extensions) $350.0 million unsecuredterm loan, bearing interest at LIBOR plus 135 basis points, based upon ourcurrent credit ratings;

• completed $314.5 million of new secured non-recourse financings at aweighted-average interest rate of 4.07%, representing a 178 basis pointimprovement over the interest rate borne by the maturing loans;

• retired approximately $432 million of consolidated property-specific loans,adding more than $742 million of undepreciated book value to ourunencumbered pool; and

• sold one mall, three associated centers, two community centers, interests intwo Class-A apartment complexes and outparcels to generate gross proceedsof over $150 million, which were used to reduce the balances on our lines ofcredit.




126. On March 14, 2016, Lebovitz and Mitchell participated in the Citi Global Property

CEO Conference, representing CBL. At that conference, Lebovitz again touted the Company’s

financing activities, stating that “[o]ur two investment-grade ratings were affirmed, and we added a

third investment-grade rating from S&P. We extended our major lines of credit to 2020, . . .

completed a new $350 million term loan and refinanced over $300 million of maturing loans,

achieving significantly lower borrowing costs.”









128. On April 28, 2016, the Company convened another conference call, this time to

discuss its financial results for the first quarter of 2016. In discussing the Company’s struggles in its

attempts to dispose of some of its less valuable operating properties, Lebovitz informed investors

and analysts that “[w]hile the financing environment continues to present a challenge we have found

creative workarounds to complete these recent transactions.” Mitchell then reported that the

Company’s “investment grade balance sheet continues to improve,” as the Company “enjoy[ed] the

benefit of lower fixed rate debt from refinancing and [its] new lower spread on lines of credit.”

Mitchell further reported that the Company had paid off loans secured by four malls and two

associated centers, totaling $100 million, had restructured loans secured by two properties (one of

which she described as a “very favorable” restructuring) and anticipated retiring an additional $130

million in property-specific loans on wholly owned properties later in the year.

129. On May 10, 2016, the Company filed with the SEC its quarterly report on Form 10-Q.

The quarterly report was signed by Mitchell and contained Sarbanes-Oxley certifications signed by





reporting.







restrictions at March 31, 2016.” The quarterly report also reiterated CBL’s obligations as a limited

guarantor of the notes issued in November 2013 and October 2014 for losses solely by reason of

fraud or willful misrepresentation and similar guarantees as to the Operating Partnership’s


131. The true facts, which were known by the defendants but concealed from the investing

public during the Class Period, included the following:

(a) CBL was not in compliance with the financial covenants and restrictions

imposed by some of its lenders, because it had inflated its rental income and its properties’

occupancy rates in its statements to those lenders;

(b) CBL’s purported successes in obtaining debt financing were, on multiple

occasions, the result of the Company having provided false financial information to the lenders who

were providing that financing;

(c) CBL was not providing to its lenders accurate information regarding its or the

Operating Partnership’s assets, including in particular the income from and occupancy rates of those

properties; and

(d) The Company’s employees were not complying with applicable laws and

regulations prohibiting the provision of material non-public information or providing full and fair

disclosure to the public, because they were providing material non-public information to selected

individuals that was not provided to the public or was provided to the public only significantly later.

THE TRUTH BEGINS TO BE REVEALED

132. Before and during the Class Period, defendants engaged in a scheme to defraud and

issued materially false and misleading statements and omissions concerning the Company’s true

condition and conduct.

133. The conduct alleged herein and the materially false and misleading statements and

omissions made during the Class Period caused CBL common stock to trade at inflated prices of as

high as $26.95 per share during the Class Period and operated as a fraud or deceit on investors in the

Company’s common stock.

134. Later, when the relevant truth was disclosed regarding defendants’ conduct, CBL’s

stock price suffered a significant decline as the artificial inflation came out of the stock price.

135. In particular, after the markets closed on November 3, 2015, The Wall Street Journal

published an article entitled “Sen. Bob Corker Profits on Quick Stock Trades.” The Wall Street

Journal reported that CBL had close ties to Senator Robert P. Corker, Jr. of Tennessee, and that, on

multiple occasions, the Senator bought shares shortly before announcements that significantly

increased the price of CBL shares, or sold shares shortly before announcements that significantly

decreased the price, and as a result had made significant profits. The article also reported that,

among several purchases of CBL stock by Senator Corker that the Senator had “disclosed only

recently after questions from The Wall Street Journal about apparent discrepancies in his Senate

financial-disclosure reports,” Senator Corker had purchased “between $1 million and $5 million in

shares of [CBL stock] in late 2011 and sold them five months later for a 42% gain.” The article

noted that these trades came at a time when financial investments by members of Congress were

under heightened scrutiny, and when Senator Corker was preparing to run for re-election in 2012.

136. Over the ensuing days, numerous other media outlets reported on the suspicious

trades. For example, on November 6, 2015, the Chattanooga Times Free Press published an article

discussing the trades, questioning how Senator Corker – “a former Chattanooga mayor, commercial

developer and millionaire whose personal and government expertise in all things financial and

investment landed him a seat at the negotiating tables on many a national money issue” – could have

overlooked the failure to disclose the trades and resulting profits. The article also drew a link to

Senator Corker’s time as mayor, when “his holdings were in a blind trust” but the Chattanooga

Times Free Press had discovered instances of Senator Corker using his City Hall email account to

get updates on one of his business investments, schedule meetings with business partners, and pass

along contacts to help the struggling venture.

137. Between November 4, 2015 and November 9, 2015, the price of CBL stock dropped

significantly. After trading at $14.85 per share when the market closed on November 3, 2015, the

stock price dropped to $13.47 by the time the market closed on November 9, 2015 – a drop of $1.38

per share or about 9.3%.

138. Approximately six months later, more of the truth was revealed. On May 24, 2016,

after the market closed, The Wall Street Journal published an article entitled “U.S. Probes Real-

Estate Firm With Ties to Sen. Bob Corker,” reporting that CBL was under investigation by both the

FBI and the SEC for allegedly “falsif[ying] information on financial statements to banks when

applying for financing arrangements.” In particular, The Wall Street Journal reported that law

enforcement officials had spoken with former CBL employees who alleged that the Company

“inflated its rental income and its properties’ occupancy rates when reporting those figures to

banks.”

139. The Wall Street Journal also reported that “FBI and SEC officials have also

separately asked questions about the relationship between the company and Mr. Corker, who is close

with senior executives at the firm and has made millions of dollars in profits trading the company’s

stock in recent years,” because the FBI and SEC were “interested in learning more about the

senator’s trading in CBL’s stock.” Suggesting that CBL executives may have given the Senator

material non-public information that informed these fortuitous trades, the article highlighted that

“several members of the family that founded CBL and runs it” have “close personal, business and

political ties” to Senator Corker. In particular, the article reported that Senator Corker had worked

for a company that helped build buildings for CBL, that three Lebovitz family members have homes

in the same “upscale Chattanooga suburb” as Senator Corker, that Stephen Lebovitz, CBL’s CEO,

had described the Senator as “a friend,” that Michael Lebovitz (an Executive Vice President at the

Company) served as vice chairman of Senator Corker’s initial Senate campaign, and that CBL

executives are “major donors” to the Senator’s campaigns.

140. Shortly after The Wall Street Journal’s May 24, 2016 article, the Company issued a

press release decrying the supposedly “baseless allegations” in that article.

141. On June 13, 2016, however, just over two weeks after its initial denial, the Company

issued a second press release. This time, the Company admitted that – consistent with The Wall

Street Journal article and contrary to the Company’s own strident denial – the Company had

“learned in a discussion with the Securities and Exchange Commission (SEC) that it is conducting an

investigation limited to four specific non-recourse secured loans originated in 2011 and 2012,” and

investigating whether information provided to lenders regarding lease status reports, revenues and

expected revenues, materially varied from the Company’s financial statements.

142. As a direct result of these revelations, CBL’s stock price fell by$1.19 per share, some

11.5%, from its closing price of $10.26 per share on May 24, 2016 to open at $9.07 per share on

May 25, 2016 (the stock price would drop as low as $8.98 per share on May 25, 2016 before

ultimately closing at $9.40 per share that day), and then lost another $0.46 per share (or 4.5%) on

June 13, 2016, cumulatively representing over one hundred million dollars in losses to investors.

APPLICABILITY OF THE PRESUMPTION OF RELIANCE:FRAUD ON THE MARKET

143. A class-wide presumption of reliance is appropriate in this action under the U.S

Supreme Court’s holdings in Affiliated Ute Citizens v. United States, 406 U.S. 128 (1972) (with

respect to material omissions), and Basic Inc. v. Levinson, 485 U.S. 224 (1988) (with respect to

materially false and misleading statements).

144. Plaintiff will rely upon the presumption of reliance established by the fraud-on-the-

market doctrine in that, among other things:

(a) Defendants made public misrepresentations or failed to disclose material facts

during the Class Period;

(b) the omissions and misrepresentations were material;

(c) the Company’s stock traded in an efficient market;

(d) the misrepresentations alleged would tend to induce a reasonable investor to

misjudge the value of the Company’s stock; and

(e) plaintiff and other members of the Class (as defined below) purchased CBL

common stock between the time defendants misrepresented or failed to disclose material facts and

the time the true facts were disclosed without knowledge of the misrepresented or omitted facts.

145. At all relevant times, the market for CBL common stock was efficient for the

following reasons, among others:

(a) as a regulated issuer, CBL filed periodic public reports with the SEC; and

(b) CBL regularly communicated with public investors via established market

communication mechanisms, including through regular disseminations of press releases on the major

newswire services and through other wide-ranging public disclosures, such as communications with

the financial press, securities analysts and other similar reporting services.

CLASS ACTION ALLEGATIONS

146. Plaintiff brings this action as a class action pursuant to Rule 23(a) and (b)(3) of the

Federal Rules of Civil Procedure on behalf of a class consisting of all those who purchased or

otherwise acquired the common stock of CBL between August 9, 2011 and May 24, 2016, inclusive,

and who were damaged thereby (the “Class”). Excluded from the Class are defendants and their

families, the officers and directors of the Company, at all relevant times, members of their

immediate families and their legal representatives, heirs, successors or assigns and any entity in

which defendants have or had a controlling interest.

147. Because CBL has millions of shares of stock outstanding and because the Company’s

shares were actively traded on the NYSE, members of the Class are so numerous that joinder of all

members is impracticable. According to CBL’s SEC filings, as of the quarter ended March 31,

2016, CBL had approximately 170 million shares of stock outstanding. While the exact number of

Class members can only be determined by appropriate discovery, plaintiff believes that Class

members number at least in the thousands and that they are geographically dispersed.

148. Plaintiff’s claims are typical of the claims of the members of the Class because

plaintiff and all of the Class members sustained damages arising out of defendants’ wrongful

conduct complained of herein.

149. Plaintiff will fairly and adequately protect the interests of the Class and has retained

counsel experienced and competent in class actions and securities litigation. Plaintiff has no

interests that are contrary to, or in conflict with, the members of the Class plaintiff seeks to

represent.

150. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the

damages suffered by individual members of the Class may be relatively small, the expense and

burden of individual litigation make it impossible for the members of the Class to individually

redress the wrongs done to them. There will be no difficulty in the management of this action as a

class action.

151. Questions of law and fact common to the members of the Class predominate over any

questions that may affect only individual members in that defendants have acted on grounds

generally applicable to the entire Class. Among the questions of law and fact common to the Class

are:

(a) whether defendants violated the federal securities laws as alleged herein;

(b) whether defendants’ publicly disseminated press releases and statements

during the Class Period omitted and/or misrepresented material facts;

(c) whether defendants failed to convey material facts or to correct material facts

previously disseminated;

(d) whether defendants acted willfully, with knowledge or with severe

recklessness in omitting and/or misrepresenting material facts;

(e) whether the market price of CBL common stock during the Class Period was

artificially inflated due to the material nondisclosures and/or misrepresentations complained of

herein; and

(f) whether the members of the Class have sustained damages as a result of the

decline in value of CBL stock when the truth was revealed and the artificial inflation came out of the

stock’s price and, if so, what is the appropriate measure of damages.

152. Plaintiff makes the allegations herein based upon the investigation of plaintiff’s

counsel, which included a review of regulatory filings made by CBL with the SEC, as well as other

regulatory filings and reports, securities analysts’ reports and advisories about the Company, press

releases and other public statements issued by the Company and media reports about the Company.

Plaintiff believes that substantial additional evidentiary support will exist for the allegations set forth

herein after a reasonable opportunity for discovery.

COUNT I

For Violation of §10(b) of the Exchange Act and Rule 10b-5Against All Defendants

153. Plaintiff incorporates ¶¶1-152 by reference.

154. During the Class Period, defendants disseminated or approved the false statements

specified above, which they knew or deliberately disregarded were misleading in that they contained

misrepresentations, and failed to disclose material facts necessary in order to make the statements

made, in light of the circumstances under which they were made, not misleading.

155. Defendants violated §10(b) of the Exchange Act and Rule 10b-5 in that they:

(a) employed devices, schemes and artifices to defraud;

(b) made untrue statements of material facts or omitted to state material facts

necessary in order to make the statements made, in light of the circumstances under which they were

made, not misleading; or

(c) engaged in acts, practices and a course of business that operated as a fraud or

deceit upon plaintiff and others similarly situated in connection with their purchases of CBL

common stock during the Class Period.

156. Plaintiff and the Class have suffered damages in that, in reliance on the integrity of

the market, they paid artificially inflated prices for CBL common stock and suffered losses when the

price of CBL common stock declined, as alleged herein.

157. Plaintiff and the Class would not have purchased CBL common stock at the prices

they paid, or at all, if they had been aware that the market prices had been artificially and falsely

inflated by defendants’ misleading statements and omissions and scheme to defraud.

COUNT II

For Violation of §20(a) of the Exchange ActAgainst All Defendants

158. Plaintiff incorporates ¶¶1-157 by reference.

159. The Individual Defendants acted as controlling persons of CBL within the meaning of

§20(a) of the Exchange Act. By reason of their positions with the Company and their ownership of

CBL stock, the Individual Defendants had the power and authority to cause CBL to engage in the

wrongful conduct complained of herein.

160. CBL controlled the Individual Defendants, the Operating Partnership and all of their

employees. By reason of such conduct, defendants are liable pursuant to §20(a) of the Exchange

Act.

PRAYER FOR RELIEF

WHEREFORE, plaintiff prays for judgment as follows:

A. Determining that this action is a proper class action, designating plaintiff as Lead

Plaintiff and certifying plaintiff as a class representative under Rule 23 of the Federal Rules of Civil

Procedure and plaintiff’s counsel as Lead Counsel.

B. Awarding plaintiff and the members of the Class damages, including interest;

C. Awarding plaintiff’s reasonable costs and attorneys’ fees; and

D. Awarding such equitable, injunctive or other relief as the Court may deem just and

proper.

JURY DEMAND

Plaintiff demands a trial by jury.