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CNL Investors Challenge Planned $1B-Plus Merger

ORLANDO-The class action lawsuit, seeking to represent 45,000 limited partners, alleges the merger of three CNL-branded companies would be a $140-million windfall for CNL Financial Group chairman James M. Seneff Jr., CNL president and treasurer Robert A. Bourne and CNL Realty Corp., the general partners of the merger participants.

By Alex Finkelstein | Updated on January 11, 2005

ORLANDO-Locally based CNL Financial Group, one of the country’s largest commercial real estate houses which rarely faces investor-initiated lawsuits, today is preparing an answer to a class action complaint seeking to represent 45,000 limited partners. The suit challenges a proposed $1.6-billion merger of three CNL-branded companies.

The 50-page complaint, brought by CNL investors San Francisco-based Sutter Acquisition Fund Inc. and Robert Lewis, alleges the merger would be a $140-million windfall for CNL Financial Group chairman James M. Seneff Jr., CNL president and treasurer Robert A. Bourne and CNL Realty Corp., the general partners of the merger participants. The $140 million “rightfully belongs to the limited partners,” the suit argues.

The defendants are CNL Restaurant Properties Inc. (CNLRP), CNL Restaurant Investments Inc., Restaurant Capital Corp., US Restaurant Properties Inc. (USRP) and CNL Income Fund Ltd. 1 to 18, known as the CNL Income Funds.

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