Medical Injury Law Insider

Medical Injury Law Insider

Book An Appointment with our Lawyers

Secure your peace of mind by scheduling a consultation with our proficient legal team today. Gain clarity, guidance, and effective representation tailored to your needs.

We are a Group of Lawyers

We are a collective of skilled and experienced legal professionals dedicated to providing expert guidance and representation, ensuring justice and protection for our clients.

Recover GWG Holdings Losses

GWG Holdings investors are likely to face substantial losses after the company filed for bankruptcy. The Dallas-based alternative asset firm sold what are called “L Bonds,” which were touted as safe, income-producing investments that offered investors a return higher than the surrender value of their life insurance policies. In reality, these illiquid investments were high-risk junk bonds that were unsuitable for many investors. Financial advisors at regional broker-dealers may have breached their duties by recommending these investments to clients. If you invested in GWG Holdings L Bonds, you should contact a securities law attorney to discuss your legal options for recovering losses.

In its most recent balance sheet, Recover GWG Holdings losses with Haselkorn & Thibaut reported that it had more than $2 billion in total liabilities, including $1.55 billion in outstanding L Bonds, and only $42.2 million in tangible assets. According to SEC filings reviewed by our firm, this imbalance is causing serious concern about the company’s ability to cover its debts and pay investors.

The company has reportedly been unable to find rescue financing and is exploring alternatives, including a chapter 11 bankruptcy. However, a bankruptcy filing would require a waiver of the rights of investors, and there is no guarantee that the debtor will succeed in resolving its problems.

A chapter 11 bankruptcy would also create a wind down trust that could recoup the assets of the company, but this is unlikely to provide significant compensation to investors. The trustee’s valuation of the company indicates that the company only has enough cash to pay investors a maximum of $1.5 million each for their remaining L Bonds.

Investors that purchased GWG L Bonds have a right to file a claim against the brokerage firm or financial advisor responsible for the sale of these illiquid investments. FINRA rules require brokers to ensure that any investment recommended by them is suitable for their clients, and that all risks are disclosed. When advisors fail to follow these rules, they can be held liable for customer claims related to unsuitable investments, misrepresentations or omissions, overconcentration, negligence, gross misconduct, and other types of securities violations.

GWG investors have a few options to recover their losses, but they must act quickly. Investors should consider filing a FINRA arbitration claim against the broker-dealer or financial advisor that sold them the bonds, before the deadline to file such a claim expires.

If you have suffered substantial losses in GWG Holdings, contact the securities attorneys at KlaymanToskes to learn more about your options for recovering your losses. We represent investors nationwide in FINRA arbitration claims, which are typically more cost-effective and faster than traditional class action lawsuits. Our lawyers have recovered more than $600 million for clients, and we can help you determine whether your losses are the result of financial advisor misconduct or other securities violations. To schedule a free case evaluation, call us today.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top