Securities Arbitration Lawyer Blog
**Update: April 20, 2022** GWG Holdings, Inc. has filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas. As a result of the bankruptcy filing, all accrued principal and interest payment obligations owed to GWG L Bond investors have been halted as the case proceeds through bankruptcy court. Chapter 11 Bankruptcy cases can take anywhere from 17 months to five years for larger and more complex cases. Despite the unwelcomed news, investors are not without recourse and are encouraged to contact New York securities arbitration law firm Iorio Altamirano LLP to review their legal rights.
*Update: April 4, 2022** According to the Wall Street Journal, GWG Holdings, Inc. is preparing to file for Chapter 11 bankruptcy in the coming days. The news of GWG’s impending bankruptcy filing is troubling for retail investors who invested significant portions of their life savings into GWG L Bonds. Investment News has reported that one anonymous GWG L bond investor estimates that the GWG L Bonds would be worth 20 to 30 cents on the dollar if GWG files for bankruptcy.
**Update: April 1, 2022** GWG Holdings, Inc. was unable to timely file its 2021 annual report with the United States Securities and Exchange Commission (“SEC”). GWG Holdings, Inc. has now failed to timely file annual reports with the SEC in three of the past four years. To read more, visit our latest blog post: GWG Holdings, Inc. Misses Deadline to File Its 2021 Annual Report with the SEC
**Update: February 14, 2022** GWG officially defaults on its obligations to L Bond investors and confirms in a letter to investors that it will not be making monthly interest or maturity payments on its GWG L Bonds, or accept redemption requests, while it continues to identify and evaluate restructuring alternatives with its advisors, which will take at least another three to four weeks and may take longer. To read more, visit our latest blog post: GWG L Bond Investor Update: GWG Holdings, Inc. Officially Defaults on Its Obligations to L Bond Investors – February 14, 2022
**Update: February 4, 2022** To read the latest on our investigation, please visit our investigation page: GWG Holdings Inc.’s L Bonds
**Update: January 25, 2022** On January 24, 2022, after missing interest and maturity payments due on January 15, 2022, GWG Holdings, Inc. sent out a notice to L Bond owners indicating that it would take “at least three to six weeks,” and maybe longer, for the company to identify and consider alternatives. The notice appears to indicate that GWG Holdings does not intend to make the missed interest and maturity payments within the 30-day grace period. If that happens, the trustees and certain noteholders may elect to accelerate their L Bonds, causing them to be immediately due and payable. As mentioned in our original post, the ability of at least some noteholders to accelerate their L Bond investments is causing some to worry that there will be a “run on the bank,” leading to financial hardships for both GWG Holdings and GWG’s L Bond investors.
Original Post:
Investors Worried After GWG Holdings Inc.’s “L Bonds” Missed Interest Payments on January 15, 2022
Iorio Altamirano LLP continues to investigate potential claims involving investments in L Bonds offered by GWG Holdings, Inc. (Nasdaq: GWGH), as GWG Holdings defaulted on its obligation to bondholders and missed interest payments on January 15, 2022.
According to GWG Holdings’ most recent filing with the United States Securities & Exchange Commission (“SEC”), on January 15, 2022, the company missed interest payments of approximately $10.35 million and principal payments of approximately $3.25 million to L Bond owners.
According to the filing, under the Amended and Restated Indenture, dated October 23, 2017, GWG Holdings, Inc. has a 30-day grace period to make the interest and maturity payments. If GWG Holdings, Inc. fails to make the interest or maturity payments within the grace period, an event of default under the Indenture will result. At that time, the trustee or noteholders holding at least 25% in the aggregate outstanding principal amount of Bonds may elect to accelerate the L Bonds, causing them to be immediately due and payable, subject to certain conditions and notices.
The ability of noteholders to accelerate their L Bond investments is causing some to worry that there will be a “fire sale” or “run on the bank,” causing financial turmoil for GWG Holdings and bondholders of GWG’s L Bonds.
On January 10, 2022, GWG Holdings also suspended the sale of L Bonds. GWG Holdings relies to a significant extent on L Bond sales to provide liquidity.
The latest news comes on the heels of GWG Holding’s independent auditor, Grant Thorton LLP, resigning on December 31, 2021. The company announced that its Annual Report on Form 10-K would likely not be completed on time, by the March 31, 2022 deadline.
Investors who purchased the L Bonds offered by GWG Holdings are encouraged to contact Iorio Altamirano LLP for a free and confidential consultation. We can review and analyze potential claims and advise individuals of their legal rights without obligation or cost.
See Also: Iorio Altamirano LLP Investigates L Bonds offered by GWG Holdings (GWGH)
About the L Bonds
An L bond is a specialty high-yield bond created and issued by GWG Holdings.
GWG Holdings has been selling L Bonds since 2012. According to a firm Form 8-K, it began selling a $2 billion L Bond offering in the summer of 2020 to a growing network of advisors from 127 firms.
L Bonds are unrated life insurance bonds that finance the purchase of life insurance contracts bought in the secondary market. Brokers received a commission of 1 to 5% of the bond’s market price.
GWG Holdings offered the L Bonds with a maturity ranging from 2 to 7 years and paying an interest rate of 5.50% to 8.50%.
The L Bonds are speculative, high-risk, and illiquid private placement offerings. They are secured by the assets of GWG Holdings and a pledge of all of the common stock by its largest stockholders.
L Bonds were likely not suitable for investors with a low-risk tolerance or investors who had liquidity needs.
How to Recover Losses or Obtain a Free Consultation
If you have invested in L Bonds offered by GWG Holdings, contact securities arbitration lawyers August Iorio at august@ia-law.com or Jorge Altamirano at jorge@ia-law.com. Alternatively, you may reach the firm by phone toll-free at (855) 430-4010.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.