What Should You Do If You Are A GK Investment Holdings 7% Bond Investor?
JCC Advisors and Other Broker-Dealers May Have Unsuitably Sold This Investment To Customers
Earlier this year, GK Investment Holdings, LLC (GKIH) sent a letter to investors warning that if 90% of them failed to trade in their current 7% Bonds with “new bonds,” which would extend the bonds’ maturity date, the old bonds would likely go into default. This could delay the repayment of bondholders’ principal or render the company unable to pay back their principal at all. GKIH cautioned that it could end up having to file for bankruptcy even. All of these possible outcomes are highly concerning for investors given that they could stand to lose money.
Unfortunately, managing broker-dealer JCC Advisors (JCC Capital Markets, LLC) and other brokerage firms may have unsuitably sold GK Investment Holding 7% Bonds to many customers while failing to fully apprise them of the risks. Due diligence failures also may have been a factor.
Our expert bond fraud losses lawyers at Shepherd Smith Edwards and Kantas (investorlawyers.com) are offering free, no-obligation case assessments to investors. Contact our team of Bond Fraud Losses Lawyers today so that we can help you explore your legal options.
Did Broker-Dealers Conduct Enough Due Diligence Into GKIH and Its 7% Bonds?
Incorporated in 2015, GK Investment Holdings is run like a special purpose entity. It was set up to issue debt securities to refinance indebtedness, make acquisitions, and pay back existing credit facilities.
In 2016, the company began offering 7% Bonds for $1K, with a $5K minimum purchase amount. Set to mature on September 30, 2022, these unsecured bonds were touted as bearing a 7% yearly fixed interest rate. Although JCC Advisors is the managing brokerage firm for selling GK Investment Holdings 7% Bonds, it was allowed to work with other brokerage firms to market and sell these investments to customers. The maximum amount of these bonds that were available to be sold was $50M.
Unfortunately, broker-dealers may not have conducted sufficient due diligence when recommending 7% Bonds to customers. Financial advisors are, in fact, required to make sure that any investment is suitable and safe for an investor given their investing goals, income, risk tolerance level, and other factors before marketing any product to a client.
GKIH Bonds May Default At The End of September 2022
It was in early 2022 that GK Investment Holdings offered investors the “option” to trade in existing 7% Bonds that were due September 30, 2022, for new bonds. This would extend the maturity date by three years to September 30, 2025.
However, if at least 90% of bondholders didn’t make the trade and the 7% Bonds matured on September 30, 2022, GHIK said it would have to sell the real estate properties it is holding in an attempt to obtain enough liquidity to redeem the bonds. The company noted that the pandemic had created unfavorable market conditions for its properties, which include a fitness center and a retail shopping center.
How Can A Seasoned Bond Fraud Losses Lawyer Help You?
It is important that you find out if your broker-dealer engaged in unsuitability, made misrepresentations and omissions, or committed due diligence failures when marketing these unsecured bonds to you. The best way to do this is to consult with knowledgeable securities and investment fraud lawyers that have the experience and skills to assess whether you have grounds for a Financial Industry Regulatory Authority (FINRA) arbitration claim to pursue damages.
Working with expert bond investor losses lawyers can maximize your chances of a full financial recovery. It also ensures that should you decide to go forward with your securities lawsuit, you will have solid legal representation advocating for your best interests while protecting your legal rights.
To speak with our skilled investment fraud attorneys at Shepherd Smith Edwards and Kantas, call (800) 259-9010 today.