[SallyB]

How is it that no one from GWG or the Broker firms not in jail?


On February 15, 2024, the GWG Wind Down Trust filed a status report with the United States Bankruptcy Court for the Southern District of Texas for the quarter ending December 31, 2023. Although the status report did not include an updated financial statement, there are several key takeaways:

The GWG Wind Down Trust has sold two of its three tangible assets for a total of approximately $10.58 million.

The sale of its life insurance policy portfolio generated $10 million in cash.

The sale of shares in FOXO stock generated $586,942.

The GWG Wind Down Trust settled a dispute with Fifth Season Investments, LLC for $8 million. Thus far, the Trust has paid $1,848,738 in cash to Fifth Season, still owing $6,151,262. The GWG Wind Down Trust previously set aside a reserve of 20 million shares of BENF. Those shares currently have a book value of $5.12 million. Accordingly, there is currently a $1 million shortfall, which the GWG Wind Down Trust will need to pay out of its cash holdings, presumably diminishing the cash it received from the sale of two of its three tangible assets.

The $10.5 million in cash proceeds represents approximately .0065% of the 1,618,517,956 in Series A1 (formerly L Bonds) WDT Interests.
The third tangible asset owned by the GWG Wind Down Trust is 169,701,487 shares of Beneficient (NASDAQ:BENF).

The Beneficient share price has dropped significantly since going public at $15 per share. On June 20, 2023, the share price closed at $4.57. By August 1, 2023, the share price closed at $2.00. On February 15, 2024, the share price closed at $0.2561.

The GWG Wind Down Trust is finding it difficult to sell its shares in Beneficient. There appears to be little to no interest on behalf of investors in purchasing shares of BENF, with shares trading in a very thinly traded market.

We believe that there is no obvious or foreseeable path to monetization for the GWG Wind Down Trust. Beneficient has made the following disclosures since August 2023:

On June 29, 2023, Beneficient received a “Wells Notice” from the SEC’s Division of Enforcement, stating that the SEC has made a preliminary determination to recommend that the SEC file a civil enforcement action against the company alleging violations of certain provisions of the Securities Act and the Securities Exchange Act relating to the Company’s association with GWG Holdings. In addition, the company’s Founder, CEO, and Chairman, Brad Heppner, also received Wells Notices related to the investigation of GWG Holdings.
Beneficient sustained an operating loss of $2.45 billion between April 1, 2023, and December 31, 2023.

As of December 31, 2023, Beneficient only had $11.2 million in unrestricted cash. In mid-2023, Beneficient disclosed that it would meet its ongoing obligations by furloughing and potentially laying off employees.

As of December 31, 2023, Beneficient’s assets were approximately $500 million, down from $2.9 billion as of 3/31/2023, driven by a goodwill impairment of $2.28 billion.
The only other asset owned by the Wind Down Trust is a beneficial interest in the GWG Litigation Trust. However, the Litigation Trust is only in an information-gathering phase.

[dewilson58]

Smells too good to be true.............lesson learned.