If you’ve been recently paying attention to the news, you’ve likely heard about the GWG Holdings bankruptcy. While this company is best known for selling life settlements and L Bonds, it filed for bankruptcy in 2022. In addition, GWGH has not paid any interest or redeemed any L Bonds as of 2022.
So what can investors do? The short answer is that investors can file lawsuits and FINRA claims.
Matthew Thibaut, Esq., Haselkorn & Thibaut (InvestmentFraudLawyers.com) a nationwide investor rights law firm, commented that it appears that some financial advisors that were marketing GWG Holdings related investments (and GWG L Bonds in particular) were not accurately representing the level of risk associated with these high-yield securities.
Haselkorn & Thibaut has opened up a GWG investor hotline at 1-888-614-9356, and they have experienced attorneys available to provide a fast, free, friendly case evaluation for investors with questions regarding their GWG investments.
Below are some quick points on GWG Holdings and the bankruptcy.
GWGH is a life settlement company
The GWGH is a life settlement company that has been in business for over 10 years. The company has acquired more than $1.7 billion in life insurance benefits. Through life settlements, GWG has paid seniors more than $283 million, which is nearly two-thirds more than the surrender value offered by insurance carriers. The GWGH has been rated “A” by the Better Business Bureau, a rating usually attributed to companies with a long track record of paying policyholders.
GWG Holdings, Inc. is a specialty finance firm and one of the leading purchasers of life insurance policies on the secondary market. In the last five years, GWG Life has paid seniors over $457 million in exchange value. As of September 30, 2017, GWG Holdings had a portfolio worth $1.6 billion in face value of policies. While this number is small compared to some companies, it is indicative of their track record and success.
GWG sold L Bonds
A publicly-traded company, GWG Holdings Inc., specializes in selling life insurance policies and alternative investments. In the January of this year, the company paused the sales of its L Bonds and retained a restructuring advisor to analyze options. GWG had previously failed to pay investors for millions of dollars in L Bonds and subsequently suspended all L Bond sales and redemption requests. This caused significant losses to investors.
L Bonds are high-yield debt instruments used to finance the purchase of life insurance policies in the secondary market. They were highly speculative and illiquid, and investors could only sell them back to GWG Holdings for a redemption fee. While this may sound like a good deal for investors, the risks were not fully disclosed to many investors. Investors need to contact an attorney as soon as possible if they purchased GWG Holdings’ L Bonds.
GWG filed for bankruptcy in 2022
GWG Holdings, Inc. filed for Chapter 11 bankruptcy protection on April 20, 2022. The company announced in a filing that it would not be able to file its Form 10-K for 2019. The reason for the delay was that the independent registered public accounting firm that the company has been working with quit in January. Moreover, the company missed numerous deadlines in the past. So, it was no surprise that it decided to file for bankruptcy.
While the bankruptcy process is not a simple process, there are several ways for investors to recover their losses. For example, investors can file a class action lawsuit against GWG if they feel that they were misled by the firm or sold investments that did not match their needs. Using a legal tool like arbitration is often faster than filing a lawsuit and can result in a more effective resolution.
GWG has not paid interest or redeemed any L Bonds in 2022
Earlier this year, GWG paused sales of its L Bonds. According to a January investor letter, the Board of Directors engaged a restructuring advisor to evaluate the company’s financial obligations. In a previous 8-K filing, the company admitted that it had failed to make millions of dollars in L Bond payments. While the company has not paid interest on its L Bonds in 2022, it has deferred requests for redemption.
Since then, the company has failed to pay any interest or redeem any L Bonds. However, investors can make up for their losses by buying the company’s stock. In addition to that, GWG Holdings has filed a registration statement for a continuous offering of up to 2 million units of L Bonds, with a principal amount of $1,000 per the whole unit. The company intends to use the net proceeds of the sale of the securities to increase its alternative asset exposure and fulfill other obligations. In the meantime, investors are left wondering whether the company will be able to recover from its bankruptcy.
GWG Holdings faces lawsuits from investors
GWGH is facing several lawsuits filed by investors, and its CEO is facing allegations of enrichment. Heppner and other executives are accused of stealing millions of dollars from investors. While PCA shareholders have been quick to defend the company, other investors aren’t so quick to back it up. Heppner’s actions have sparked several class action lawsuits, with some even calling for GWGH’s CEO to be fired.
The lawsuits allege that brokerage firms failed to conduct due diligence on GWG Holdings’ L Bonds and recommended illiquid investments. The brokerage firms, in turn, earned substantial commissions by selling the bonds. When the company issued L Bonds, it initially invested the money in life insurance policies. It later stopped investing in life insurance policies and started investing the money in The Beneficient Company Group, LP, a private company controlled by Heppner.
from lawyers.buzz https://lawyers.buzz/how-to-recover-losses-from-gwg-holdings-bankruptcy/
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