GWG Holdings shares fall 6% after Chapter 11 bankruptcy declaration


By Chris Wack

Shares of GWG Holdings Inc. fell 6% to $1.88 after the company and two of its subsidiaries filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of Texas in connection with of a restructuring process.

The stock, which was halted during premarket trading, hit a 52-week low of $1.45 on April 7 after the company said it received a letter from the listing qualifications department of the Nasdaq stock market stating that it did not comply with the requirements of a Nasdaq listing rule.

The asset manager said the restructuring will allow it to improve its liquidity and its ability to meet its financial obligations, while increasing the value of its assets.

The debtor subsidiaries in the Chapter 11 cases are GWG Life LLC and GWG Life USA LLC.

The Wall Street Journal reported on April 4 that GWG was set to file for bankruptcy.

The company also said it had obtained financing from the debtor in possession to facilitate the restructuring and had filed a petition with the court for the approval of this financing.

The DIP Credit Agreement is structured as a $65 million multi-draw term loan facility and will be provided by National Founders LP.

Proceeds from all or part of the DIP Credit Agreement may be used for, among other things, general corporate purposes, including working capital and permitted acquisitions, administrative expenses, bonuses, expenses and transaction fees contemplated by Chapter 11 cases, and for other purposes consistent with the DIP Credit Agreement.

GWG Holdings intends to continue its day-to-day operations as a debtor in possession.

Write to Chris Wack at [email protected]


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