Investors might be facing losses after Houston, Texas based energy company Hi-Crush Inc. (NYSE: HCR) filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas. Soreide Law Group is reviewing possible investor lawsuits against those financial advisors and securities brokers who sold HCR.
Who Is Hi-Crush?
Apparently, Hi-Crush provides the North American petroleum industry proppant and logistics solutions. The company reportedly has production facilities generating monocrystalline sand – something used as proppant throughout the well completion process to foster natural gas and oil recovery. Evidently, Hi-Crush provides services including Hi-Crush proppant supply and midstream distribution management, NextStage silo equipment sales and leasing, Pronghorn advanced logistics and website operations, and PropDispatch proppant management, logistics dispatch and inventory software.
Hi-Crush Files For Chapter 11 Bankruptcy Protection To Eliminate $450,000,000
On July 13, 2020, Hi-Crush announced a Restructuring Support Agreement. Those in agreement consisted of 94% of holders of HCR’s senior unsecured notes due 2026. To do this, the company filed for chapter 11 bankruptcy protection.
Under a Prearranged Plan of the Restructuring Support Agreement, the company eliminates $450,000,000 of unsecured note debt. Moreover, the company indicated commitments of $65,000,000 in debtor-in-possession financing and exit financing.
According to the company, the Prearranged Plan, First day Motions, and DIP/Exit Facilities, if approved, will also provide for the cancellation of current equity, conversion of $450,000,000 in existing pre-petition debt into equity, and $40,000,000 rights offering for new secured convertible notes. Evidently, HCR expects to wrap up the chapter 11 proceedings within 90 days.
As of July 10, 2020, HCR shares were listed at $0.15, a penny from its 52-week low and far from its $2.40 52-week high.
Brokers’ Responsibility To Conduct Due Diligence On GPB Capital Funds Before Making Recommendations
Investments in the energy sector are aggressive and have experienced substantial volatility since 2015. And the risks are not just inherent in energy stocks – bonds and notes issued by energy companies can contain significant risks too. This is why it is so important that securities brokers and financial advisors take appropriate steps to ensure that their recommended energy investments, including stocks and bonds, are suitable for investors. Not that, but financial professionals must conduct due diligence on investments before making recommendations. Some financial advisors could have sold unsuitable or misrepresented investments and even breached their fiduciary duty to investors upon selling Hi-Crush investments.
Did You Suffer Losses By Investing in Hi-Crush Because Of Your Financial Advisor?
Have you experienced losses by investing in Hi-Crush (HTC) or other investments because of your financial advisor? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The firm has recovered millions of dollars for investors who have suffered losses due to misconduct of securities brokers and financial advisors.