Investors Initiate Class Action Against Broadmark Realty Following Major Financial Concerns

Investors File Class Action Lawsuit Against Broadmark Realty Capital Inc.

On June 6, 2025, the esteemed law firm Robbins Geller Rudman & Dowd LLP announced the filing of a class action lawsuit against Broadmark Realty Capital Inc. (NYSE: BRMK) and Ready Capital Corporation (NYSE: RC). This lawsuit has been initiated by investors who held Broadmark common stock as of the critical date of the May 2023 merger between Broadmark and Ready Capital. As per the firm’s announcement, those who believe they have suffered substantial financial losses now have an opportunity to lead this class action lawsuit, officially titled Grant v. Broadmark Realty Capital, No. 25-cv-01013 in the Western District of Washington.

Background on the Allegations

The class action lawsuit specifically targets not only Broadmark and Ready Capital but also several of the top executives and directors of both companies, as well as the external asset manager tied to Ready Capital. The allegations stem from significant claims of misleading statements made in connection with the merger process, which has left many investors questioning the integrity of the information they received.

According to the allegations, the proxy statement used to solicit support from Broadmark shareholders was misleading and failed to disclose crucial financial issues. These include:
1. A substantial number of borrowers in Ready Capital's portfolio were reportedly under financial stress due to soaring interest rates, leading to escalated borrowing costs.
2. An oversupply of multifamily properties in the operational markets severely limited the ability of these borrowers to raise rents effectively, exacerbating their financial difficulties.
3. The acquisition of a major development project (the Ritz-Carlton in Portland, Oregon) faced significant hurdles, including unforeseen costs and funding shortfalls, raising concerns about its viability and impacting the overall value of Ready Capital's loan portfolio.
4. Consequently, it is claimed that Ready Capital's provisions for expected credit losses were greatly underestimated, compounding concerns about the company’s financial transparency.
5. Overall, the lawsuit suggests that the financial projections shared by Ready Capital regarding earnings per share, dividends, and book value lacked accurate foundations at the time they were presented to investors.

Since the lawsuit was filed, the stock price of Ready Capital has significantly underperformed, remaining below the merger price, which raises serious questions about the future stability of the company and the confidence of its investors.

Understanding the Class Action Process

Per the Private Securities Litigation Reform Act of 1995, investors who held Broadmark common stock at the time of the merger are eligible to seek appointment as the lead plaintiff in this lawsuit. This is an important position as the lead plaintiff not only represents all other class members but also plays a crucial role in directing the course of the litigation. They possess the authority to select a law firm for representation, ensuring that their interests are adequately represented during the legal proceedings.

Robbins Geller’s Role

Robbins Geller is recognized as one of the foremost law firms specializing in securities fraud and class actions. Their track record in recovering substantial monetary relief for investors is commendable, with reports indicating that they have recouped over $2.5 billion in 2024 alone for litigations related to securities. The firm’s reputation precedes it, frequently being ranked among the top in handling these sensitive and critical cases.

Final Thoughts

As investors await further developments in this class action lawsuit, the case serves as a vital reminder of the need for transparency and trust in the investment process. The legal landscape surrounding corporate mergers and acquisitions continues to evolve, making it crucial for shareholders to remain vigilant about the information provided by companies. The outcome of this lawsuit could have far-reaching implications not just for Broadmark Realty and Ready Capital, but for investors across the real estate investment trust (REIT) sector. Investors who believe they qualify as lead plaintiffs are encouraged to reach out to Robbins Geller for further instructions and guidance.

For more information or to express interest in leading the class action, potential claimants can contact Robbins Geller at 800-449-4900 or by email.