SSEK Law Firm Continues to Investigate GWG Holdings Who Defaults On $13.6M Owed to L Bond Investors
DALLAS, Feb. 22, 2022 /PRNewswire/ -- On February 14, 2022, GWG Holdings (GWGH) sent a letter to shareholders letting them know that it defaulted on the $3.25M in principal payments plus $10.35M in interest payments owed to L Bond investors.
The Texas-based alternative asset firm had a 30-day grace period to issue the payments beginning on January 15, 2022. GWG Holdings also stated that redemption requests would continue to be deferred. Now, L Bond investors are left with high-yield junk bonds that are not paying them the income promised. These are alternative investments that cannot be redeemed or sold.
What are L Bonds?
GWG Holdings notified the US Securities and Exchange Commission (SEC) on January 18, 2022, that its failure to pay the $13.6M to shareholders was because of a decrease in L Bond sales. An L Bond is a private placement and an illiquid, unrated life insurance bond.
In the recent letter, GWG notified L Bond shareholders that the Company was looking at restructuring alternatives. It also shared that it was exploring options to "conserve and maximize the value of GWGH's assets" to benefit investors and meet financial obligations.
GWG Holdings said this process could take another three to four weeks. The alternative asset firm also noted that monthly and maturity payments would not be issued during this process.
According to GWG's balance sheet, its total outstanding debts — about $327.7M in senior credit facilities and $1.552 billion in L Bonds —are greater than its reported $794.7 million in fair value of its tangible assets, $67.7 million in cash and restricted cash, and $226.1 million in alternative investments.
Also, the Company's Form 10-K for the year concluding on December 31, 2020, reported nearly $530M in net losses.
FINRA Arbitration Options for L Bond Investors
GWG L Bonds may have been sold by hundreds of brokerage firms, including Emerson Equity, Aegis Capital, Centaurus Financial, and many others. If you are an L Bond shareholder, your best chance for financial recovery is to file a FINRA arbitration claim against the broker-dealer and their financial advisor that sold you these alternative investments.
Explore legal options with our skilled L Bond attorneys that assist investors who suffered losses in these risky, illiquid private placements.
Contact us today for a free, no obligation case consultation:
Toll Free: (800) 259-9010
[email protected]
www.investorlawyers.com
SOURCE Shepherd Smith Edwards & Kantas LLP
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