Hospitality Investors Trust Shareholders may have Recovery Options
CHICAGO, June 03, 2021 (GLOBE NEWSWIRE) -- The White Law Group is investigating potential securities claims involving broker dealers who may have unsuitably recommended Hospitality Investors Trust Inc. (formerly known as American Realty Capital Hospitality Trust, Inc.) to investors.
On May 19, 2021, Hospitality Investors Trust Inc., a non-traded REIT that owns a portfolio of hotel properties, filed for Chapter 11 bankruptcy in Delaware to restructure its $1.3 billion unsecured debt.
Last December, the REIT amended its limited partnership agreement with its investment partner, Brookfield Strategic Real Estate Partners II Hospitality REIT II LLC.
The REIT explained that due to the impact of the coronavirus global pandemic on its business, the company expected it would no longer have sufficient cash on hand to continue to pay its current obligations during the first half of 2021.
What does Bankruptcy Mean for Hospitality Investors Trust Shareholders?
According to filings, each share of Hospitality Investors Trust common stock outstanding will be cancelled and exchanged for a right to receive contingent cash payments (CVR). Shareholders of the common stock will receive one CVR in exchange for each share of common stock. The maximum amount of payments made per CVR will not exceed $6.00 and will not be transferable, except in limited instances such as the death of the holder.
Shares Value See Continual Decline since 2017
The company has yet to declare a Net Asset Value for 2020, but as of December 31, 2019, it was $8.35 per share, a 9.3% decrease from the 2018 NAV. Shares were originally sold for $25.00 per share. According to Central Trade & Transfer, a secondary market for non-traded REITs, shares of HIT REIT sold on March 31, 2021 for just $0.46 per share.
Potential Lawsuits to Recover Investment Losses
The trouble with non-traded REITs, like Hospitality Investors Trust Inc., is that they are complex and inherently risky products.
Broker dealers are required to inform clients of the risks associated with investment recommendations and to ensure that those recommendations are suitable for the investor in light of the investor’s age, risk tolerance, net worth, and investment experience. Firms that fail to do so, may be held responsible for any losses.
Lack of liquidity is often problematic for many investors. Investors looking to sell often have difficulty finding a buyer, and can suffer significant losses on the sale.
If you have suffered losses investing in Hospitality Investors Trust Inc., you may be able to recover your losses through FINRA arbitration. Please contact The White Law Group at 888-637-5510 for a free consultation with a securities attorney.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois. For more information on the firm, visit www.WhiteSecuritiesLaw.com.
The White Law Group
D. Daxton White, Managing Partner
(888)637-5510
info@whitesecuritieslaw.com