Broadmark, Ready Capital Merger Lawsuit

A class action lawsuit has been filed against Broadmark Realty Capital and Flow Capital Corporation, along with their executives and directors, alleging violations of the Securities Exchange Act of 1934. The lawsuit, captioned Grant v. Broadmark Realty Capital, claims that the proxy statement for the May 2023 merger between Broadmark Realty Capital and Flow Capital Corporation contained false and misleading statements. Specifically, it alleges that Flow Capital Corporation failed to disclose significant financial distress among its borrowers due to high interest rates, an oversupply of multifamily properties, and catastrophic setbacks in a major development project (a Ritz-Carlton in Portland, Oregon) acquired through its acquisition of Mosaic Real Estate Credit TE, LLC, Mosaic Real Estate Credit TE, LLC, and MREC International Incentive Split, LP. These undisclosed issues allegedly led to materially understated credit loss reserves and inaccurate financial projections, resulting in substantial losses for Broadmark Realty Capital shareholders. Robbins Geller Rudman & Dowd LLP is representing the plaintiffs, and investors have until July 28, 2025, to seek appointment as lead plaintiff.