InPoint Commercial Real Estate Income Inc. (ZINPDX), also known as InPoint, is a company that falls under the larger umbrella of The Inland Real Estate Group of Companies. Its main goal was to offer a new way for people to invest in the commercial real estate market. In the beginning, InPoint aimed to gather up to $500 million from investors. The plan was to focus on a variety of commercial real estate investments, including loans and securities, and even some direct investments in properties. However, things haven't gone as smoothly as hoped, and the company has faced a lot of problems, leaving many investors worried.
The first major signs of trouble for InPoint appeared in early 2020, around the time when the COVID-19 pandemic started to impact the world. The pandemic threw a wrench in the company's plans, disrupting the economy and making it hard for InPoint to achieve its goals. In March 2020, the company had to stop its program for buying back shares from investors (the share repurchase program), and it also had to pause its public offering and the distribution of profits. By the beginning of 2021, InPoint had only managed to raise a small part of the funds it had aimed for, struggling to invest as planned and to maintain enough cash flow.
Adding to the problems, it became hard to figure out how much the company's real estate investments were actually worth. The market was very unstable, and even though they had advisors to help value their properties, it's hard to know if those valuations were accurate. This uncertainty, along with the fact that it was difficult to sell these investments, made it tough for investors to know the real value of their shares.
A share repurchase program is when a company buys back its own shares from the marketplace. This action can increase the value of remaining shares because there are fewer shares available, potentially making each share worth more. It also signals the company's confidence in its own financial health. When a company like InPoint suspends this program, it can harm investors in several ways. Firstly, it removes a significant buyer from the market, which can lead to a decrease in share price. Secondly, it may signal to investors that the company is not as financially robust as believed, leading to a loss of confidence. Lastly, investors counting on the buyback as an exit strategy might find themselves with fewer options to sell their shares, especially during volatile market conditions.
Investors who faced losses with InPoint may consider pursuing legal action against advisors and brokers, focusing on claims of misrepresentation, breach of fiduciary duty, and making unsuitable recommendations. These professionals must thoroughly understand the investments they recommend and ensure these suggestions align with their clients' financial goals and risk tolerance. However, if advisors and brokers aggressively pushed InPoint's offerings without fully disclosing the inherent risks or without considering the investors' best interests, this could be grounds for legal action.
Misrepresentation could be claimed if advisors misrepresented the nature, benefits, or risks of the investment, leading investors to make decisions based on inaccurate information. Breach of fiduciary duty may be argued if advisors put their own interests or the interests of the firm ahead of their clients, failing to act with the care and loyalty required by law. Unsuitable recommendations mean that investments were not aligned with the investors' objectives, financial situation, or risk tolerance, potentially resulting in significant financial harm.
These legal challenges can focus on the failure of advisors and brokers to adequately disclose the potential for loss, the liquidity issues, or the real risks associated with InPoint's strategy, especially considering the company’s financial difficulties and market volatility.
If you've faced losses due to your investment in InPoint Commercial Real Estate Income Inc., you might want to talk to a securities lawyer. The Soreide Law Group, which has helped investors across the United States get back their lost funds, can clarify your legal options and next steps. They operate on a contingency fee basis, meaning you only pay if you win, and they advance all the upfront costs. To learn more, reach out to Soreide Law Group online or at (888) 760-6552.
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