GWG L Bonds Proposed Settlement Pennies on the Dollar

In a recent article from InvestmentNews, Bruce Kelly writes that GWG Holdings Inc. filed for chapter 11 bankruptcy protection almost three years ago and investors who bought $1.6 billion in GWG L bonds have now been offered pennies on the dollar in a settlement proposal made in March. Beneficient, a platform for illiquid alternative investments that was a spin off from GWG before it went bankrupt, has made an offer of $50.5 million to settle claims related to lawsuits filed in federal court in Texas, including GWG’s bankruptcy proceeding, from April of 2022.

Kelly adds that for many years before its bankruptcy, approximately 40 broker/dealers sold clients close to $1.6 billion in GWG L bonds. They were called L bonds because they were backed by life settlements. These bonds were sold in $1,000 units. According to the article, funds from the proposed settlement will be allocated to holders of allowed claims in GWG’s bankruptcy case, with an estimated $31.48 per $1,000 unit of L bonds, before deductions. In other words, this will be a little over three cents for every dollar invested.       

Many investors, including elderly retirees, were misled into believing L Bonds were low-risk, secure investments, when in fact GWG L Bonds were high-risk and considered unsuitable for many investors.

In an article published in January from InvestmentNews, Bruce Kelly writes about the GWG L bond and the elderly. He states that harm to senior citizens in the retail brokerage marketplace is a constant issue. The Financial Industry Regulatory Authority Inc. (FINRA) oversees industry arbitration complaints and reported 212 complaints that cited “elder abuse” in 2023 among the variety of reasons why a lawsuit was filed, an increase of almost 13 percent compared to a year earlier. Many elderly investors’ life savings were devastated by GWG L bond sales.

Soreide Law Group has successfully brought dozens of cases before FINRA involving GWG L bond sales.  If your broker/dealer or financial advisor recommended GWG L bonds to you and you’ve suffered devastating losses, contact Soreide Law Group and speak to an experienced securities lawyer at no cost regarding the possible recovery of your financial losses at:  888-760-6552.

Soreide Law Group represents clients nationwide before FINRA on a contingency fee basis.