GWG Holdings $50.95M L Bond Securities Settlement

Investors who purchased or acquired L Bonds issued by GWG Holdings Inc. between June 3, 2020, and April 16, 2021, may be eligible to receive a cash payment from a class action settlement.

GWG Holdings Inc., its former officers and directors, The Beneficient Co. Group L.P. and its former auditor Whitley Penn LLP agreed to pay $50,950,000 to resolve a securities class action lawsuit. The lawsuit alleged GWG and related defendants violated federal securities laws by making false or misleading statements in the June 3, 2020, registration statement for L Bonds, including misrepresentations about Ben’s business model, financial performance and other key information.

Who are the class members?

Class members must meet all of the following criteria:

• They purchased or otherwise acquired L Bonds issued by GWG Holdings Inc.
• They made the purchase or acquisition pursuant and/or traceable to the registration statement declared effective on June 3, 2020.
• Their transaction occurred between June 3, 2020, and April 16, 2021, inclusive.

This includes both direct and indirect holders of L Bonds, such as those who held their investments through brokers or custodians. The settlement administrator compiled a comprehensive list of potential class members using records from the GWG Wind Down Trust, subscription agreements and broker-provided lists.

Holders of Series A1 Interest in the Wind Down Trust are also eligible for a payment.

How much can class members receive?

The total settlement fund is $50,950,000. The actual amount each class member will receive depends on several factors, including the total number of valid claims, the net settlement fund after deductions and the amount of L Bonds each class member purchased or acquired during the class period.

The estimated average recovery before deductions is $31.48 per $1,000 unit of L Bonds. This estimate is based on the total principal amount of GWG’s public L Bond debt as of the bankruptcy filing date. However, the final amount may be higher or lower.

No action needed to receive compensation

Eligible class members do not need to file a claim. The trustee will distribute payments to eligible class members based on the records on file.

The settlement administrator may request additional information to confirm their eligibility or transaction history.

Those who believe they are a class member but did not receive notice should contact the settlement administrator to verify their status and ensure their information is up to date.

$50.95 million settlement fund breakdown

The $50,950,000 settlement fund includes:

• Settlement administration costs: To be determined
• Attorneys’ fees: Up to $8,619,000
• Attorneys’ expenses: Up to $500,000
• Payments to eligible class members: Remainder of the net settlement fund

Important dates

• Fairness hearing: Jan. 13, 2026

When is the GWG Holdings Inc. securities litigation payout date?

The settlement administrator will issue payments after the court grants final approval of the settlement and resolves any appeals.

Why is there a class action settlement?

The class action lawsuit alleged that GWG Holdings Inc. and related defendants violated federal securities laws by making false or misleading statements in the June 3, 2020, registration statement for L Bonds. Investors claimed the defendants misled them about Ben’s business model, financial performance and other key aspects of the offering.

The defendants denied all allegations but agreed to settle to avoid the uncertainty, burden and expense of further litigation.

Sources

1. Class notice
2. GWG settlement agreement
3. Whitley Penn settlement agreement
4. Settlement website