Wenzel v. Knight et al
OPINION. Signed by District Judge John A. Gibney, Jr on 6/1/15. (tdai, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
DOROTHY WENZEL, on behalf of
herself and all others similarly situated,
GLADE M. KNIGHT, et al.,
Apple REIT Eight, Inc. ("A8"), the company at the center of this suit, created a program
that allowed its shareholders to forgo a cash dividend in favor of receiving more shares in the
company. Wenzel, an A8 shareholder, brings this putative class action against A8, its directors,
managers, and advisors, alleging that they set the price for those dividend-reinvestment shares at
an artificially high rate. Having already had her first complaint in this matter dismissed, Wenzel
comes back for a second bite. She asks the Court to find that, in setting the share price so high,
the defendants breached a contract, interfered with her business expectancy, defrauded
shareholders, committed negligence, and perpetrated Virginia state law securities fraud. The
defendants filed this motion to dismiss under Federal Rule of Civil Procedure 12(b)(6).
Wenzel originally brought this action against A8 and Apple REIT Seven, Inc. ("A7"), a
similarly managed but legally distinct real estate investment trust. The Court dismissed that
original complaint because Wenzel lacked standing to sue on behalf ofA7 shareholders, failed to
appropriately assert fiduciary breach claims against A8 as derivative actions, and failed to state a
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