Beneficient Announces Court Approval of GWG Litigation Settlement

Rhea-AI Summary

Beneficient (NASDAQ: BENF) has received approval from the Bankruptcy Court for the Southern District of Texas for a settlement agreement resolving all GWG Holdings-related litigation claims against the company, its subsidiaries, and their current and former directors and officers. The settlement, announced on March 10, 2025, will be paid within insurance policy limits and remains subject to approval from the District Court for the Northern District of Texas. The agreement resolves all claims without any admission of fault or liability. While this settles claims in the Bankruptcy Court, other GWG-related claims against parties outside Beneficient remain active, including claims against entities related to Beneficient's founder and CEO, for whom the company has indemnification obligations.

Positive

• Settlement approval resolves all GWG litigation claims against Beneficient in the Bankruptcy Court
• Settlement amount falls within insurance policy limits, minimizing direct financial impact
• No admission of fault or liability in the settlement agreement

Negative

• Settlement still requires Northern District Court approval
• Company faces ongoing indemnification obligations for claims against entities related to founder and CEO
• Other GWG-related claims against parties outside Beneficient remain unresolved

Insights

Legal Expert

Beneficient secures crucial bankruptcy court approval for GWG litigation settlement, significantly reducing legal exposure while staying within insurance coverage limits.

The court approval of Beneficient's settlement agreement represents a significant risk reduction for the company. By resolving all claims in the GWG Litigation within insurance policy limits, BENF has effectively contained what could have been a substantial financial liability without direct impact on its balance sheet.

This settlement structure is particularly advantageous for shareholders as it:

• Eliminates potential uncapped liability exposure
• Avoids any admission of fault or wrongdoing
• Provides finality to the bankruptcy proceedings (subject to the 14-day appeal window)

While the settlement still requires Northern District Court approval, the bankruptcy court's endorsement substantially increases the likelihood of final resolution. The company can now refocus resources on business operations rather than litigation defense.

The disclosure about remaining claims against entities related to the founder/CEO warrants attention. Beneficient's indemnification obligations to these parties represent a contingent liability that could potentially impact the company financially if those separate claims result in significant judgments. The extent of these obligations isn't quantified in the release, leaving some residual uncertainty.

From a governance perspective, this settlement demonstrates management's practical approach to resolving legacy issues while preserving shareholder value. By containing the settlement within insurance coverage, they've effectively transferred the financial burden to insurers rather than depleting company resources.

DALLAS, June 17, 2025 (GLOBE NEWSWIRE) -- Beneficient (NASDAQ: BENF) (“Beneficient,” “Ben” or the “Company”), a technology-enabled platform providing exit opportunities and primary capital solutions and related trust and custody services to holders of alternative assets through its proprietary online platform, AltAccess, today announced that the Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) has approved the previously disclosed settlement agreement resolving all claims pending in the Bankruptcy Court under the previously disclosed lawsuits relating to GWG Holdings, Inc. (“GWG” and such litigation, the “GWG Litigation”) against the Company, its subsidiaries, and each of their current and former directors and officers (the “Beneficient Parties”). The settlement agreement remains subject to the approval of the District Court for the Northern District of Texas (the “Northern District Court”).

As previously announced on March 10, 2025, the Company entered into a binding settlement agreement to resolve all claims in the GWG Litigation for a sum within applicable insurance policy limits. With the Bankruptcy Court's approval, the settlement in the Bankruptcy Court is now final, subject to a 14-day period to appeal. The settlement resolves all claims filed in the Bankruptcy Court against the Beneficient Parties without any admission, concession or finding of any fault, liability or wrongdoing by the Company or any defendant.

“We are pleased that the Bankruptcy Court has approved this settlement, allowing us to move forward with a renewed focus on executing our business strategy and creating value for our shareholders,” said a Company spokesperson.

Following the settlement of the GWG Litigation in the Bankruptcy Court, other outstanding GWG-related claims against parties other than the Beneficient Parties remain outstanding, including certain claims against entities related to Beneficient's founder and CEO to whom Beneficient owes certain indemnification obligations. The Company continues to support a vigorous defense against such claims.

About Beneficent

Beneficient (Nasdaq: BENF) – Ben, for short – is on a mission to democratize the global alternative asset investment market by providing traditionally underserved investors − mid-to-high net worth individuals, small-to-midsized institutions and General Partners seeking exit options, anchor commitments and valued-added services for their funds− with solutions that could help them unlock the value in their alternative assets. Ben’s AltQuote™ tool provides customers with a range of potential exit options within minutes, while customers can log on to the AltAccess^® portal to explore opportunities and receive proposals in a secure online environment.

Its subsidiary, Beneficient Fiduciary Financial, L.L.C., received its charter under the State of Kansas’ Technology-Enabled Fiduciary Financial Institution (TEFFI) Act and is subject to regulatory oversight by the Office of the State Bank Commissioner.

For more information, visit www.trustben.com or follow us on LinkedIn.

Contacts
Matt Kreps 214-597-8200 mkreps@darrowir.com
Michael Wetherington 214-284-1199 mwetherington@darrowir.com
investors@beneficient.com  

Forward Looking Statements

Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding approval of the settlement agreement by the Northern District Court, any potential appellate proceedings in the Bankruptcy Court and the outstanding GWG-related claims against entities related to the Company’s founder and CEO to whom the Company owes certain indemnification obligations. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are based on our management’s beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected.

Important factors that could cause actual results to differ materially from those expressed in the forward-looking statements include, among others, the risks, uncertainties, and factors set forth under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and its subsequently filed Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events, or circumstances or other changes affecting such statements except to the extent required by applicable law.

Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

FAQ

What did the Bankruptcy Court approve for Beneficient (BENF) regarding the GWG litigation?

The Bankruptcy Court approved a settlement agreement that resolves all claims in the GWG litigation against Beneficient, its subsidiaries, and their current and former directors and officers.

When did Beneficient (BENF) initially announce the GWG litigation settlement?

Beneficient announced the binding settlement agreement on March 10, 2025.

Does the BENF settlement with GWG require any additional approvals?

Yes, the settlement still requires approval from the District Court for the Northern District of Texas.

What are the financial terms of Beneficient's GWG litigation settlement?

The settlement amount will be paid within applicable insurance policy limits, though the specific amount was not disclosed.

Are there any remaining GWG-related claims against Beneficient (BENF)?

While claims in the Bankruptcy Court are resolved, there are outstanding GWG-related claims against other parties, including entities related to Beneficient's founder and CEO, for whom the company has indemnification obligations.