GWG Holdings Bankruptcy Creates Need for Coordinated Representation of Bondholders

Rhea-AI Summary

GWG Holdings, Inc. (NASDAQ: GWGH) filed for bankruptcy protection on April 20, 2022, in Texas, with investigations ongoing by the U.S. Securities and Exchange Commission regarding its business practices. Attorneys from Sommerman, McCaffity, Quesada & Geisler are advocating for a coalition to protect the interests of over $1.3 billion in bonds held by investors. They emphasize the need for a committee representing bondholders in bankruptcy proceedings to pursue viable claims against GWG and its management.

Positive

• Attorneys are forming a coalition to advocate for bondholders' rights.
• Potential for recovery of investor claims exceeding $1.3 billion.

Negative

• GWG Holdings filed for bankruptcy, indicating significant financial distress.
• Ongoing SEC investigation raises concerns over previous business practices.

Sommerman, McCaffity, Quesada & Geisler urges coalition to assure protections for defrauded investors 

DALLAS, April 22, 2022 /PRNewswire/ -- Dallas-based GWG Holdings, Inc. (NASDAQ: GWGH), a nationwide marketer of financial products and investments, and two affiliated entities filed for bankruptcy protection on April 20 in the Southern District of Texas. Meanwhile, the company's previous business practices and sales tactics remain under investigation by the U.S. Securities and Exchange Commission.

Recognizing the need to protect the interests of all bondholders, attorneys with Sommerman, McCaffity, Quesada & Geisler in Dallas are calling for the creation of a coalition of willing law firms, investors and bondholders to form a united front for the bankruptcy proceedings.

"GWG Holdings filed a bankruptcy and failed to provide disclosure concerning any specifics regarding holders of L Bonds," says firm partner Sean McCaffity. "We believe that more than $1.3 billion in bonds are currently being held by thousands of individual investors who may have viable claims against GWG and its management. It is essential that we form an investor-focused committee tasked with looking out for their interests in this case."

The firm believes that it is essential that either an ad hoc committee of claimants or an unsecured creditors committee with bondholder representation be appointed or authorized to act as a watchdog in the bankruptcy proceedings to assure that financial losses are investigated and claims pursued where necessary and feasible.

"The holders of L Bond notes may have claims against GWG and its affiliated entities that could be impacted or otherwise adversely affected in the bankruptcy case, and we need to have a coordinated response," says McCaffity. 

Sommerman, McCaffity, Quesada & Geisler has a distinguished reputation for knowledgeable and assertive legal representation in complex commercial litigation involving business fraud, audit malpractice, director and officer liability, and fraudulent transfers. 

To assist individual bondholders who may have questions about the latest developments, the firm has established a dedicated website with additional background, regular updates, and other information at www.gwglawsuit.com. 

Media Contact: 
Sophia Reza 
800-559-4534 
sophia@androvett.com  

View original content:https://www.prnewswire.com/news-releases/gwg-holdings-bankruptcy-creates-need-for-coordinated-representation-of-bondholders-301531260.html

SOURCE Sommerman, McCaffity, Quesada & Geisler

FAQ

What caused GWG Holdings to file for bankruptcy on April 20, 2022?

GWG Holdings filed for bankruptcy due to financial distress, and its business practices are under investigation by the SEC.

How much in bonds are currently held by investors in GWG Holdings?

Investors hold more than $1.3 billion in bonds.

What is the role of Sommerman, McCaffity, Quesada & Geisler in the GWG Holdings bankruptcy?

They are advocating for a coalition to protect the interests of bondholders during the bankruptcy process.

What steps are being taken to protect bondholders in the GWG Holdings bankruptcy?

A proposed committee is being formed to represent bondholders and monitor financial claims in the bankruptcy proceedings.

What is the significance of the SEC investigation into GWG Holdings?

The SEC investigation concerns the company's previous business practices, potentially impacting investor claims and recovery.