GWG L Bond Investors Concerned About GWG Holdings Bankruptcy Filing

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GWG Holdings L Bonds

GWG L Bond investors are suing to recover the losses.

NEW YORK CITY, NY, USA, May 13, 2022 /EINPresswire.com/ — AlphaBetaStock.com reported that GWG Holdings Inc. (GWGH) filed for bankruptcy protection on April 20, 2022 with the Southern District of Texas Bankruptcy Court (File 22-90032). The company announced in February 2022 that it would not be able to meet its payment obligations on its L bonds after missing principal and interest payments on the bonds totaling $13,600,000. Life settlements support these L Bonds.

Investors who bought GWG L bonds suffered huge losses. GWG Holdings’ auditor resigned in December 2021. The company had total liabilities of more than $2 billion at the end of September 2021, including $1.55 billion in L bonds. other unpaid debts, in accordance with GWG’s L Bond Prospectus.

Investors have filed lawsuits and complaints against GWG Holdings to recover funds. Bondholders have allegations that investors have not fully understood the risks.

Matthew Thibaut, Esq., Haselkorn & Thibaut (InvestmentFraudLawyers.com), said that based on calls we’ve been receiving recently, it appears that some financial advisors who marketed investments related to GWG (and GWG L-Bonds in particular) were not accurate representing the level of risk associated with these high yield securities.

The law firm has opened a GWG Investor Hotline at 1-888-614-9356 for a free “GWG Holding Investment Recovery Guide” and confidential assessment to assist investors.

GWG Holdings raised cash from bond buyers to invest in secondary market life insurance plans. They then used the proceeds from those policies to compensate investors when people died.

The NASDAQ-listed company provides financing to secondary market term life insurance owners. The company is currently not listed on NASDAQ. In a federal lawsuit filed in the United States, GWG and its executives are implicated in defrauding investors. Issuer GWG’s supervising broker is Emerson Equity LLC. It should be noted that GWG Holdings owns Life Epigenetics and GWG Life.

GWG Holdings began issuing L Bonds to the public in January 2012 and continued to do so until April 2021. Its L Bonds had a weighted average interest rate of 7.25% on September 30, 2021 and 7. 21% on December 31. , 2020, respectively. At the end of both periods, the principal outstanding of L Bonds plus Liquidity Bonds was less than $1.3 billion.

Beneficent Company Group LP (BEN)

According to the latest SEC filings, one of GWG’s largest shareholders is Beneficent Company Group LP (BEN), alongside CONCERT Wealth Management Inc. BEN, a Dallas-headquartered financial services company, markets a range of offerings from trust and liquidity administration to alternative solutions. asset investors. The firm primarily focuses on mid- and high-net-worth clients ranging in value from $5 million to $30 million, plus small to mid-sized institutional investors with investable assets under $1 billion.

Pursuant to the class title claim, GWG Holdings transferred approximately $350,000,000 to BEN and its affiliates between 2018 and 2019. They issued $366 million of L bonds to an affiliate. Unfortunately, GWG soon ran into cash flow problems as the L Bonds were phased out in April 2021. GWG had pledged its entire collection of term life insurance plans as collateral for debts to keep the business afloat until August 2021. These policies were subject to a fair value. of about $790 million at the time.

The Beneficient Company Group separated from GWG Holdings Inc. at November 2021. Additionally, BEN repaid the loan agreement with GWG of nearly $202 million by granting limited partnership common stock to GWG. As a result, BEN no longer owes GWG. Prior to its split, Beneficient was under the control of GWG Holdings until November 2021.

The Beneficient Company Group and GWG signed a trade credit agreement in January 2018. GWG purchased 82% of Beneficient Company Group’s total principal limited partnership rights from current investors as part of this strategic engagement. The Beneficient Company Group was valued at up to $800 million upon acquisition, which included a $150 million capital injection into GWG.

Donald Wiggins
Alpha Beta Stock
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