Newton, MA (March 5, 2003): Senior Housing Properties Trust (NYSE: "SNH") today announced that the lawsuit which it and Five Star Quality Care, Inc. (AMEX: "FVE") brought against Marriott International, Inc. (NYSE: "MAR") and Marriott's wholly owned subsidiary Marriott Senior Living Services, Inc. ("MSLS") to prevent the transfer of the management contracts affecting 31 senior living communities to Sunrise Assisted Living, Inc., (NYSE: SRZ) has been dismissed.
SNH owns the 31 senior living communities which are leased to Five Star and managed by MSLS. Last year Marriott International announced its intention to sell MSLS to Sunrise. SNH and Five Star brought a lawsuit in the Massachusetts Superior Court seeking a declaration that SNH and Five Star may terminate the management contracts because of the proposed sale. Marriott and MSLS moved to dismiss the lawsuit, and yesterday the Massachusetts court granted the motion to dismiss.
SNH and Five Star are now considering whether to seek reconsideration or to appeal the Massachusetts court decision.
A second lawsuit brought by Marriott and MSLS against SNH and Five Star remains pending in the Circuit Court for Montgomery County, Maryland. The Maryland lawsuit concerns the question of whether alleged financial mismanagement by Marriott and MSLS may permit SNH and Five Star to terminate the management contracts. As previously announced, the Maryland court has enjoined the termination of the management contracts before the trial of that case.
Because it is unlikely that a Massachusetts case appeal or the Maryland case trial will occur before the planned sale of MSLS to Sunrise, SNH now expects Sunrise may assume management of the 31 communities later this month.
WARNING REGARDING FORWARD LOOKING STATEMENTS
THE FOREGOING PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND THE FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON SNH'S CURRENT BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT GUARANTEED TO OCCUR. FOR EXAMPLE, THE FACT THAT SNH AND FIVE STAR ARE CONSIDERING WHETHER TO APPEAL THE MASSACHUSETTS COURT DECISION OR TO SEEK ITS RECONSIDERATION DOES NOT MEAN THAT THEY WILL DO SO, NOR THAT ANY SUCH APPEAL OR RECONSIDERATION WILL CHANGE THE RESULT OF THE CASE DISMISSAL. SIMILARLY, SNH'S EXPECTATION THAT SUNRISE MAY ASSUME MANAGEMENT OF 31 SENIOR LIVING COMMUNITIES OWNED BY SNH LATER THIS MONTH IS BASED UPON PUBLIC STATEMENTS PREVIOUSLY MADE BY MARRIOTT AND SUNRISE. HOWEVER, SNH IS NOT PARTY TO THE CONTRACT BETWEEN MARRIOTT AND SUNRISE OR TO THE NEGOTIATIONS OR ARRANGEMENTS BETWEEN THOSE PARTIES. ACCORDINGLY, SUNRISE MAY NOT ACQUIRE MSLS OR ASSUME THESE MANAGEMENT RESPONSIBILITIES FOR REASONS OF WHICH SNH IS NOT AWARE OR WHICH ARE NOT RELATED TO THE DISPUTES AND LAWSUITS BETWEEN SNH AND FIVE STAR ON THE ONE SIDE AND MARRIOTT AND MSLS ON THE OTHER SIDE. DISCOVERY DURING LAWSUITS AND DECISIONS BY COURTS MAY RESULT IN DECISIONS WHICH ARE DIFFERENT THAN THOSE NOW EXPECTED BY SNH. LITIGATION MAY BE EXPENSIVE AND IT CAN HAVE UNEXPECTED RESULTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.