Property Group and Real Estate Developer Woodbridge Files for Bankruptcy Amidst SEC Investigation

The luxury real estate developer Woodbridge Group of Companies recently filed for Chapter 11 bankruptcy, purportedly citing costs of expansion, litigation and a government fraud investigation, according to Reports from a U.S. Bankruptcy Court in Wilmington, Delaware under review by securities attorneys Jason kane and James Booker.

Peiffer Wolf Carr & Kane securities practice lawyers are investigating sales practices of investment professionals who recommended and sold Woodbridge to investors and Woodbridge Group’s Chapter 11 bankruptcy.

Woodbridge Mortgage Investment Fund investors who believe they may have lost money are encouraged to contact attorneys Jason kane or James Booker with any useful information or for a free, no obligation discussion about their options.

The SEC has been undertaking a look into whether Woodbridge allegedly defrauded investors who purportedly invested over $1 billion into the real estate entity, according to an October SEC court filing. The SEC also allegedly sought more information regarding 236 limited liability companies Woodbridge formed, the SEC notes.

The SEC has been investigating Sherman Oaks, California-based Woodbridge, an entity which calls itself a leading developer of high-end real estate, since 2016 for alleged possible fraudulent sales of securities, according to court documents.

Woodbridge also claims that it also had received inquiries from about 25 state regulators about its securities sales and the alleged offer and sale of unregistered securities by unregistered agents, according to reports from California.

Robert Shapiro, who recently resigned as Woodbridge’s chief executive officer on Friday, has been in the headlines lately after he bought the Owlwood Estate in Los Angeles, the famed former home of stars such as Cher and Tony Curtis, for $90 million, the Reports note.

Woodbridge, a privately owned company which owes about $750 million to an estimated 8,998 note-holders also specializes in lending and alternative financing, said it would fully cooperate with regulators, according to documents filed in the U.S. Bankruptcy Court in Delaware.

Woodbridge operates through an intricate network of more than 250 affiliated companies owned by RS Protection Trust, of which Shapiro is the trustee and his family members the sole beneficiaries, Reports state.

Woodbridge Allegedly Plans to Use the Bankruptcy Proceedings to Restructure $750 Million in Debt and have Already Received a Commitment for Up to $100 Million in Debtor-in-possession Financing from Hankey Capital

Purported turnaround specialist Lawrence Perkins of SierraConstellation Partners has allegedly taken the helm as chief restructuring officer, but Shapiro will carry on to receive a $175,000 monthly consulting fee during the Chapter 11 proceedings, according to the aforementioned reports presently being reviewed by attorneys Jason kane and James Booker.

Woodbridge also allegedly said it had settled three of the state inquiries and was in advanced talks with authorities in Arizona, Colorado, Idaho and Michigan when it filed for Chapter 11 protection, the reports state.

What is more, the company said it planned to use the bankruptcy proceedings to restructure $750 million in debt and had already obtained a commitment for up to $100 million in debtor-in-possession financing from Los Angeles-based Hankey Capital, the reports state. The financing was secured by a first priority lien on 28 properties, and Hankey is also willing to consider providing bankruptcy exit financing, the reports note.

Some investment insiders had their eyebrows raised when Woodbridge investors were allegedly not paid their monthly dividends last week, according to reports from Califronia, which blamed rising legal and compliance costs for its problems.

Woodbridge released the following statement:

“Historically a leading developer of high-end real estate, as the size and scope of the business has grown, increased operating and development costs have been exacerbated by the unforeseen costs associated with ongoing litigation and regulatory compliance… This combination of rising costs and regulatory pressure led to a loss of liquidity, resulting in Woodbridge’s inability to make its regularly scheduled one-year notes payment due Dec. 1, 2017.”

No allegations of misconduct are being made against Woodbridge in this blog.

Woodbridge Securities Sales Practices Investigated by Securities Lawyers

The Peiffer Wolf Carr & Kane securities lawyers often represent investors who lose money as a result of investment-related fraud or misconduct and are currently investigating sales practices involving the Woodbridge Mortgage Investment Fund securities. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Woodbridge investors who believe they lost money as a result of their investments in Woodbridge may contact the securities lawyers at Peiffer Wolf Carr & Kane, Jason kane or James Booker, for a free no-obligation evaluation of their recovery options, at 585-310-5140 or via e-mail at jkane@prwlegal.com or jbooker@prwlegal.com.