NEW YORK CITY—American Realty Capital Properties‘ former chief accounting officer on Thursday brought a defamation suit against the embattled net lease REIT, as well as former chairman Nicholas Schorsch and former CEO David S. Kay. The suit from Lisa McAlister, filed in New York State Supreme Court in Manhattan, alleges that then-CEO Schorsch ordered her and then-CFO Brian Block to cover up accounting errors, and that she was then terminated for bringing the financial improprieties to light. AR Capital, which sponsors ARCP and several other traded and non-traded companies, says the lawsuit is “without merit.”

McAlister says in her lawsuit that beginning in the fourth quarter of 2013, ARCP stopped pro-rating certain non-recurring transaction and deferred financing costs, therefore increasng its adjusted funds from operations. The suit alleges that although McAlister raised a red flag on the practice, it continued until late July 28, when Schorsch directed Block and McAlister to to reallocate the funds used to calculate the AFFO and shift the numbers on the REIT’s Q2 2014 10Q report. The company also changed the starting point for its AFFO calculations from “net loss attributable to stockholders (in accordance with US GAAP)” to “net loss (in accordance with US GAAP).”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.