NEW YORK CITY—American Realty Capital Properties' former chief accounting officer, who alleged that she was fired in retaliation for raising the red flag on accounting irregularities, has terminated her lawsuit against the net lease REIT, court documents show. The suit, which also named former chairman Nicholas Schorsch and former CEO David S. Kay as defendants, was “discontinued without prejudice,” according to a one-page order filed Thursday afternoon at New York State Supreme Court in Manhattan.

The suit brought by former CAO Lisa McAlister was filed a few days after Schorsch's Dec. 12 resignation from ARCP's board and Kay's Dec. 15 resignation as the company's CEO. President and COO Lisa Beeson resigned on the same day as Kay. William Stanley, the lead independent director of ARCP's board, was named to serve as interim chairman and CEO until permanent replacements are found.

McAlister and CFO Brian Block were replaced after an audit committee found that ARCP's adjusted funds from operations had been overstated for the first and second quarters, while net losses were understated. The audit committee, ARCP said, determined that the accounting errors were “identified but intentionally not corrected” and that previously issued financial information from those quarters should no longer be relied upon.

In her lawsuit, McAlister and her attorneys asserted that Schorsch had instructed her and Block to cover up accounting errors—an assertion the company said was unfounded. The suit claimed that McAlister had voiced concerns about the accounting practices and that she was subsequently fired and made “a scapegoat for defendants' fraudulent conduct.”