A class action has been commenced in the United States District Court for the Eastern District of Pennsylvania on behalf of shareholders who purchased or otherwise acquired RAIT common stock (NYSE:RAS) during the Class Period. Lead Plaintiff has been appointed in the litigation, but no representatives of purchasers of RAS B, RAS C, or RAS Bonds have stepped forward.

The complaints charge RAIT and certain of its officers and trustees with violations of the Federal Securities Laws. RAIT is a real estate investment trust, providing comprehensive debt financing options to the real estate industry including bridge and mezzanine loans, preferred equity investments, trust preferred securities (“TruPS”) and subordinated debt for private and corporate owners of commercial real estate, REITs and real estate operating companies and their intermediaries throughout the United States and Europe.

According to the complaints, during the Class Period, defendants issued materially false and misleading statements that misrepresented and failed to disclose (i) RAIT’s relationship with American Home Mortgage (“AHM”); (ii) that the payment to RAIT by AHM of the TruPS was in jeopardy, which could result in at least a net exposure of $95 million, or $1.56 per share of book value; and (iii) that RAIT had failed to adequately reserve for the risk of nonpayment by AHM.

On July 31, 2007, RAIT shocked the market by announcing that it did not receive payment from AHM of TruPs due on July 30, 2007. The price of RAS B shares declined in reaction to this news from a close on July 30, 2007 of $16.92 to a close on July 31, 2007 of $11.65. The price of RAS C shares declined in reaction to this news from a close on July 30, 2007 of $21.50 to a close on July 31, 2007 of $17.50. The price of RAS Bonds declined from a close on July 30, 2007 of $88.58 to a close on August 1, 2007 of $53.55.