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BRMK.US
id: 1612

Broadmark Realty ($BRMK) Misleading Proxy, Deceptive Financial Projections, and Post-Merger Collapse Case

Investors can submit applications for the lead plaintiff role.
W.D. Washington
Court
2:25-cv-01013
Case number
04/17/2023
Class period Start
05/31/2023
Class period End
07/27/2025
Lead Plaintiff motion deadline
  • $BRMK investors filed a claim against Broadmark Realty and Ready Capital for misleading shareholders with inflated financial forecasts and omitting material risks in the lead-up to their 2023 merger.
  • After Ready Capital's earnings collapsed and its loan portfolio deteriorated, the stock fell over 60%, dropping from $10.11 to below $4.00 per share post-merger.
  • $BRMK investors can join this case to be notified about potential recovery.
Case Details:

On May 30, 2023, Broadmark shareholders approved a merger with Ready Capital based on a proxy promising strong returns, higher dividends, and future growth. Shareholders were told they’d receive 0.47233 shares of $RC for each $BRMK share, with projected annual dividends of $1.60.

But the merger was built on misleading forecasts. Ready Capital failed to reveal that many borrowers were already struggling with rising interest rates and that a $504 million Ritz-Carlton project acquired through a previous deal was in serious trouble. That property later required a $130 million write-down and sparked litigation.

After the merger, Ready Capital’s condition worsened fast. By mid-2024, it had modified over $800 million in loans, reported $28.5 million in non-cash interest, and saw earnings crash to just $0.07 per share—nowhere near the promised $1.60. The annual dividend was cut to $0.50, and over $1.2 billion in troubled loans were shifted to a liquidation portfolio.

Based on these events, $BRMK investors filed a claim against Broadmark and Ready Capital, accusing the companies of the following:
  • It provided inflated forecasts for earnings, dividends, and asset values.
  • It failed to disclose distress in the Mosaic loan portfolio, including a failing $504M Ritz-Carlton project.
  • It omitted internal concerns about rising borrower delinquencies and liquidity issues.
Considering all the representations, investors believe the companies concealed material financial deterioration to secure the merger and protect executive compensation.
Case Type
US Securities Class Action
Case Status
Lead Plaintiff Submission
Alleged Offence
Misleading Statements
Financial Misrepresentation
Failure to Disclose
Suspected Party
Directors
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
03/03/2025
Filing date
05/28/2025
Lead Plaintiff Deadline
07/27/2025

Broadmark Realty Capital Inc

Broadmark Realty Capital Inc. operates as a commercial real estate finance company in the United States. It engages in underwriting, funding, servicing, and managing a portfolio of short-term trust...

    Ticker
    BRMK.US
    ISIN
    US11135B1008
    CIK
    0001784797
    Sector
    Real Estate
    Industry
    REIT - Mortgage
    Country
    USA
    Address
    1420 Fifth Avenue, Seattle, WA, United States, 98101