Articles Tagged with L Bonds

Despite Misgivings, Court Approves $10M Financing for Troubled GWG Holdings

One day after GWG Holdings filed for Chapter 11 bankruptcy protection, Judge Marvin Isgur of the US Bankruptcy Court in Houston approved $10M in financing for the asset manager despite his concerns regarding the mechanics of the loan. The emergency loan will come from National Founders LP. 

According to The Wall Street Journal (WSJ), in court papers, GWG said it needed the money to avoid “imminent liquidation.” The Texas-based alternative asset firm owes about $1.6B in L Bonds. Despite being illiquid and high-risk, these high-yield bonds were mainly marketed to individual investors by around 145 regional brokerage firms, including managing broker-dealer Emerson Equity. They earned high commissions of around 8% from the transactions. 

Firm Owes Millions to Investors of GWG High-Yield L Bonds  

Shepherd Smith Edwards and Kantas (SSEK Law Firm at is looking into claims of losses by customers who purchased GWG L Bonds at the recommendation of Emerson Equity broker Tony Barouti. 

Unfortunately, it appears that Barouti, who is based out of Los Angeles, may have unsuitably sold L Bonds to several investors, including retirees and older retail customers.

Texas-Based Alternative Asset Firm Sends Letter About Failed Payments on Valentine’s Day 

On February 14, 2022, GWG Holdings (GWGH) sent a letter to shareholders letting them know that it defaulted on the $3.25M in principal payments plus $10.35M in interest payments owed to L Bond investors. 

The Texas-based alternative asset firm had a 30-day grace period to issue the payments beginning on January 15, 2022. GWG Holdings also stated that redemption requests would continue to be deferred. Now, L Bond investors are left with high-yield junk bonds that are not paying them the income promised. These are alternative investments that cannot be redeemed or sold.

Deadline for GWG Holdings to Pay L Bond Investors $13.6M is Fast Approaching 

Our investment fraud lawyers are speaking with investors who suffered losses in GWG L Bonds. These private placement, high-yield junk bonds were issued by GWG Holdings, Inc. (GWGH) and may have been marketed and sold by many broker-dealers, including Aegis Capital, Emerson Equity, and others.  

GWG L Bonds have been available since 2012. However, their sales have been put on “pause” after being reinstated in December 2021 after a suspension of several months. Formerly called Renewable Secured Debentures, it was renamed L Bonds in 2015. GWG Holdings launched a new offering made up of its secured debt known as the Liquidity Bond 2020.  

Hundreds of Broker-Dealers May Have Sold Up to $2B of High-Yield Junk Bonds 

InvestmentNews reports that according to an industry insider, GWG Holdings may have issued up to $2B of high-yield junk bonds in recent years. While Emerson Equity is the managing broker-dealer for the GWG Issuer, there may have been hundreds of other broker-dealers that also sold L-Bonds to investors. 

In a January 15, 2022 filing with the US Securities and Exchange Commission (SEC), GWG disclosed that it hasn’t been able to issue $13.6M in principal payments and interest that it owes to L Bond investors. The Dallas-based alternative asset manager has a 30-day grace period to complete the payments or risk default. 

Contact Information