The Wall Street Journal reported that GWG Holdings recently declared bankruptcy as a result of the firm’s default on its L Bonds. For many individual investors, this speculative alternative investment turned out to be unsuitable. Bondholders have recruited Haselkorn & Thibaut Law Group to represent them in a FINRA arbitration case in an effort to recover investment losses in these L Bonds. We think there were significant omissions and false statements made during the sale. Our clients want to be reimbursed for their entire loss.
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Describe GWG Holdings.
Through its subsidiary, GWG Life, LLC, GWG Holdings holds and oversees a portfolio of life insurance policies. L Bonds are a class of products developed by GWG that pooled funds from bond buyers to buy life insurance policies on the secondary market, then used the proceeds of the policies’ payouts when persons passed away to reimburse the bond buyers. In the Chapter 11 bankruptcy petition it submitted in April 2022, GWG identifies itself as a financial services company with two main asset classes. Assets from secondary life insurance come first. The second involves financial stakes in separate, unconnected businesses that function in the fields of alternative assets and epigenetics, respectively.
The GWG Insolvency
Following recent news coverage and company disclosures concerning the firm’s financial difficulties, GWG filed for bankruptcy. GWG recently switched to chasing a loan to support a chapter 11 process after having previously sought rescue financing that would have allowed it to restructure its balance sheet without going to court. Following recent interest and principal payment defaults by the business, a statement that it was unable to submit its annual report on Form 10-K by the deadline, and an ongoing SEC investigation, GWG Holdings filed for bankruptcy.