Land located in Newark, New Jersey that was owned by one of its private placement funds has been sold off, as advised by GPB Capital Holdings, though neither the terms of the deal nor plans for reaching the proceeds to investors have yet been revealed. Citing an unnamed source, however, the Wall Street Journal has claimed that the 30-acre parcel was valued at $78.3 million.
It is expected that the private placement investors of GPB Cold Storage will benefit from this asset disposal.
According to Haselkorn & Thibaut, P.A. (www.InvestmentFraudLawyers.com), investors have filed lawsuits and arbitration claims against financial advisors and the financial services firms recommending GPB investments to recover investor losses. To assist GPB investors, they have set up a 1-888-902-6872 toll-free number and you can call them today to receive your free “GPB Capital Investor guide.”
Asset shedding by GPB
The continuance of shedding of assets is welcome news for its investors, who have received neither distributions nor dividends since 2018.
GPB Capital, in September, had advised selling a top auto dealership group for $880 million, followed by, in December, the sale of Alliance Physical Therapy Partners to Chicago-based healthcare investor BPOC. It may be recollected that the largest fund of GPB, GPB Holdings II, had acquired Alliance Physical in 2017.
Rob Chmiel, CEO of GPB Capital was quoted as saying that the deal will “return significant value to our investors,” and “we are focused on working with our independent monitor on a plan to distribute available proceeds from this transaction to the partnership’s investors.”
While refusing to comment on the land deal, a spokesperson of GPB advised the information on its investments is now available on a new website created by the company.
GPB began to falter in 2018 when it failed in its duty to make public its audited financial statements, inviting the scrutiny of regulators.
GPB was charged by the SEC as well as the Justice Department in civil as well as criminal matters following which a District Court Judge had appointed a monitor for the group last year under whom the private placement investor has been operating since.
Though there is a lack of publicly available information about the workings of private placements such as the ones sold by GPB, as per information filed with the SEC by various broker-dealers in 2015, $3.5 million had been paid out as sales commission to a network of broker-dealers on sales of GPB Cold Storage worth $35.9 million. This translates to a sales commission of 9.8%, which is at the high end permitted under the rules and guidelines of the securities industry.
It is widely known that private investors like GPB use their war chests for making acquisitions. The war chests, in turn, are built through borrowings and leverage.