Already under investigation by the US Securities and Exchange Commission for financial fraud, the Woodbridge Group of Companies has filed for Chapter 11 bankruptcy protection. According to InvestmentNews, this move comes a week after the luxury real estate developer missed payments due to investors on the notes they had purchased.
The company has raised over $1B from investors, including senior investors. InvestmentNews reports that many investors were told that their investments would be safe in real estate. Now, however, Woodbridge is saying that it has $750M of debt. Court documents submitted in US Bankruptcy Court state that this is how much nearly 9000 noteholders are owed.
Woodbridge Wealth sells the following investments: first positions in commercial mortgages, secondary market annuities, and a commercial bridge loan. However, reports InvestmentNews, the Financial Industry Regulatory Authority’s BrokerCheck doesn’t show any registered brokerage firm by that name.
The SEC is looking at whether Woodbridge or others violated federal securities laws related to the investor funds it received. Last month, the regulator submitted a subpoena enforcement action naming the 235 limited liability companies that still need to hand over documents related to its probe of Woodbridge.
The LLCs are believed to have engaged in financial transactions involving the real estate developer. This week, the Commission appeared at Woodbridge’s bankruptcy hearing and expressed concerns about the Chapter 11 proceedings.
Also, reports Reuters, Woodbridge said that more than 25 state regulators have reached out to the company about the securities it sold, as well as regarding allegations that unregistered agents had offered and sold unregistered securities. The company has settled with three states. Woodbridge was in negotiations with authorities from several other states when it filed for bankruptcy protection. The company said that it plans to restructure the debt it owes.
If you are a Woodbridge investor and you suspect that your losses may be due to securities fraud, contact Shepherd Smith Edwards and Kantas, LTD LLP today.
Property group Woodbridge files for bankruptcy amid SEC probe, Reuters, December 4, 2017
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