Texas Bankruptcy Judge Approves New Chapter 11 Financing Option for GWG Holdings
New Financing Package Is Still No Guarantee of Financial Recovery for 27,000 L Bond Investors
The Texas Southern Bankruptcy Court has approved a new debtor-in-possession financing package for GWG Holdings. The alternative asset firm, which sold $1.6B of L Bonds to investors, filed for Chapter 11 bankruptcy protection in April 2022. Not long after, a judge at the US Bankruptcy Court in Houston allowed GWG to borrow a $10M emergency loan from National Founders LP to avoid immediate liquidation.
This new verbally approved financing package is for $65M and offers the option to sell GWG’s life insurance asset portfolio for at least $610M—that’s $1B less than what L Bond investors are owed. It takes the place of another $65M financing package deal, includes lower interest rates and fees, and provides other protections. The loan is to be issued by Chapford SMA Partnership LP.