Articles Tagged with Chapter 11

Chicago-based Stoltmann Law Offices continues to represent investors in claims to recover investment losses in connection with the COVID-19 pandemic.  The carnage wrought by COVID-19 on brick and mortar stores and retail shops has taken down two REITs:  The Pennsylvania Real Estate Investment Trust (PREIT) and the CBL & Associates Properties, Inc. (CBL) each filled for Chapter 11 Bankruptcy this week.  Facing catastrophic losses in connection with retail tenants unable to pay rents, the REITs didn’t seem to believe they had many other options available.  If you were an investor in CBL or PREIT, your shares are now worthless. If you were solicited to invest in CBL or PREIT by a financial or investment adviser, you could have a claim to pursue to recover your losses.

PREIT and CBL are publicly traded Real Estate Investment Trusts (REITs).  These REITs are listed on the New York Stock Exchange and trade on a fairly liquid basis. Any individual REIT maintains investments in any number of properties, from as few as two, to as many as twenty or more. REITs are concentrated real estate investments and should only play a small role in an investor’s otherwise well-managed, diversified portfolio of investments.  If your accounts have more than 10% invested in REITs, you should consider setting up an appointment with your financial advisor to discuss your broader asset allocation.

REITS, whether they are traded or the more speculative, illiquid non-traded REITs, may be unsuitable for most retail investors for another reason. Many retail investors have most of their net-worth concentrated in property already – their home – and do not need to have any additional exposure to complicated, potentially high risk investments like REITs.

The Financial Industry Regulatory Authority (FINRA) is expecting a massive wave of arbitration claims against brokers and their brokerage firms in the coming months, thanks to bad energy investments. Because of the huge drop in oil prices, many of the cases being discovered are ones in which an adviser put too much of a client’s money into energy investments that turned out to be basically worthless as U.S. oil prices collapsed. Many of the customers are elderly and too much of their portfolios were put into risky oil and gas investments. And adviser must take into account if the investment is suitable for the client or not, and age, net worth, investment objectives and risk tolerance play large factors in determining this. Many advisers put much of their client’s money into oil and gas and energy investments, because the commissions were high. Now, with oil prices tumbling, it is a very bad situation for those whose portfolio was concentrated in the resources. High-yield default rates in the energy sector are expected to spike to 20% this year from about 7% at the end of 2015, and less than 1% in December 2014, according to Fitch ratings. The trailing 12 month default rate among exploration and production companies will jump even higher by the end of 2016, to between 30% and 35%, also Fitch estimates.

Another issue investors could see is that many do not become aware of the extent of their losses until they receive their year-end statements from their broker, or around the month of April. This could very well solidify the fact that analysts are predicting many more arbitration claims in the coming month and months ahead. Some client’s money was concentrated almost exclusively in oil and gas investments and these individuals are expecting to be hit especially hard. Some of the investments include: Linn Energy, AmeriGas Partners and British Petroleum, among others. Linn Energy, in a filing with the Securities and Exchange Commission (SEC) on Tuesday stated that a Chapter 11 bankruptcy filing may be “unavoidable.” This means serious trouble for investors. Call us today if you have experienced losses with Linn Energy or other oil and gas or energy investments. We may be able to help you bring a claim against your brokerage firm to recover your money.

Stoltmann Law Offices has learned that Energy & Exploration Partners of Fort Worth is seeking Chapter 11 bankruptcy protection after suppliers and service companies sought payment for unpaid bills. The company owns about 61,000 net acres in Texas and Wyoming, with the Texas holdings located mostly in Woodbine and Eagle Ford shales. The company made the filing after Schlumberger Technology, Baker & Hughes, and Cactus Pipe & Supply initiated an involuntary bankruptcy against the company. Several other oil and gas companies have filed for bankruptcy recently, what with the price of oil dropping sharply. Our securities law office is interested in speaking to investors who were recommended to invest in oil and gas by their broker. If so, you may have a case against your brokerage firm because not all oil and gas investments are suitable for every retail investor. They tend to be risky and illiquid. A brokerage firm can be sued for not reasonably supervising their brokers and we take these cases on a contingency fee basis, which means we do not make money unless you recover. The call to us is free. Please call today.

F-Squared Investments filed for Chapter 11 bankruptcy on Wednesday. This comes after an agreement F-Squared made in December to pay $35 million to settle charges it made false claims about the performance of a flagship investments product. The company ran into trouble before 2008 in regards to its AlphaSector strategy, when they launched the product, claiming its strategy could temper and withstand violent market swings, by trading out of exchange-traded funds (ETFs). Then the assets fell when the firm saw almost $8 billion in asset declines as of March 31st. Virtus Investment Partners, its mutual fund distributor, cut F-Squared as well.

In 2014, F-Squared was given a Wells Notice after an investigation into how the company advertised the performance of its stock from the year earlier. F-Squared claimed to use proprietary models to represent how their stock would do based on past performance, when, in reality, the models were never tested. If you invested money with F-Squared, please call us at 312-332-4200 to speak to an attorney about your options of recovering money through FINRA arbitration.

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