If distributions are declared and paid, the amount of the distributions paid may decrease or distributions may be eliminated at any time. These alternative investments are generally only suitable for savvy investors who are wealthy and sophisticated. Hospitality Investors Trust is classified as a Non-Traded Real Estate Investment Trust ("REIT") that was touted as offering current income to investors with a conservative to moderate. One reason many brokers may have sold HIT REIT to their clients is because of the significant commissions paid to them as HIT charged high upfront fees and commissions. According to recent SEC filings, the board of Hospitality Investors Trust has approved an estimated net asset value (NAV) $9.21 per share for the companys common stock, as of December 31, 2018. Lack of liquidity is often problematic for many investors. The White Law Group may be able to help you recover your financial losses by filing aFINRAarbitration claim against the brokerage firm that sold you the investment. The Company operates as a public, non-traded real estate investment trust ("REIT"), meaning that it is: "public" because it is registered with the However, brokers and financial advisors who improperly recommended HIT or other similar products may be legally responsible for the losses suffered by their clients. As result, there have multiple lawsuits from Hospitality Investors. The trust. After all, a non-traded REIT is considered to be a complex, illiquid, and high-risk investment, not suitable for many retail investors. The lawsuit, which has been filed by class-action law firm Hagens Berman, contests that Choice Hotels International, Hilton, Hyatt Hotels . Hospitality Investors Trust (HIT) is a publicly registered non-traded real estate investment trust (REIT), formerly known as American Realty Capital Hospitality Trust. There are two types of REITs: publicly traded and non-traded. If you suffered financial loss because your broker recommended HIT or any other similar programs to you, you may have a right to file a claim to recover your losses. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. Based on law firm verdicts and settlements exceeding $4 billion, our securities fraud lawyers are committed to seeking justice for the victims of investment fraud and misconduct. Advisors and brokers who improperly recommended the HIT to their clients may be held liable for the losses. Copyright 2023 AlphaBetaStock.com All Rights Reserved | AlphaBetaStock.com is a financial news publisher that does not offer any personal financial advice or advocate the sale or purchasing of any investment/security. The result is a long way from where the REIT started in 2014 when it raised $903 million from investors. While REITs are often marketed as low-risk, high yield investments, FINRA and the SEC have recently increased scrutiny into the marketing of these investments. The White Law Group continues to Hospitality Investors Trust, Inc. (HIT REIT) 2021 Lawsuit *UPDATED* Did your broker recommend an investment in Hospitality Investors Trust Blog, Current Investigations, Securities Fraud. Contact us now for a free consultation! The attorneys and staff at Peiffer Wolf Carr Kane Conway & Wise produce top-quality work and our results speak for themselves. Your inquiry will be immediately reviewed by one of our attorneys who handles securities litigation. On May 19, 2021, Hospitality Investors Trust, Inc. ("HIT") and its operating partnership, Hospitality Investors Trust Operating Partnership, L.P. (the "OP" and, together with HIT, the "Debtors," and, together with their subsidiaries, the "Company"), entered into a restructuring support agreement (the "RSA") with Brookfield Strategic Real Estate Kahane is a director at Business Development Corporation of America, American Reality New York Recovery REIT, Inc., and several other American Reality companies. These increases were mainly a result . HIT was sold for $25 per share originally. They must ensure that all recommendations are suitable for the investor. The White Law Group is investigating potential securities fraud claims against the broker dealers that improperly sold high risk non-traded REITs, like HIT REIT to investors. Their lawyers are currently representing investors and are looking into the claims of many investors who have lost money in this investment. For more information, please read our full disclaimer. This law blog website is managed by MileMark Media. When a broker fails to fulfill these obligations, the firm that employs them may be held accountable for losses suffered by an investor to whom an unsuitable investment recommendation was made. There were numerous conflicts of interest within the trust. HIT was originally a blind pool offering, further making the investment highly speculative. Yes. We are the founder of Mass Torts Made Perfect. What is happening with Hospitality Investors Trust? and will not be transferable, except in limited instances such as the death of the holder. Healthcare Trust Inc. was originally known as American Realty Capital Healthcare Trust II, Inc. Healthcare Trust was a high risk investment, and it should have only been recommended to investors who could afford a complete loss of their investment. 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. Hospitality Investors Trust Lawsuit In January 2014 sales activity continued under the company's name, but was suspended in November 2015. Eileen is involved in the firms securities practice and has over a decade of experience in the legal world. Investors in HIT REIT will see their stock canceled and trade for the right to contingent cash payments. Led by attorney Peter Mougey, the past President of the national securities bar PIABA, our Securities and Business Tort Department has represented more than 1,500 investment fraud victims across the country in state and federal court and securities industry arbitration. Hospitality Investors Trust no longer has sufficient cash fund its obligations and Brookfield is the only likely provider of additional liquidity, according to its 2020 annual report. Hospitality Investors Trust Inc. class action, Hospitality Investors Trust Inc. complaints, Hospitality Investors Trust Inc. investigation, Hospitality Investors Trust Inc. liquidation, Hospitality Investors Trust Inc. secondary sales. Further, Hospitality Investors Trust, one of the investments allegedly recommended to the claimants, filed for Chapter 11 Bankruptcy on May 19, 2021 to restructure its $1.3 billion unsecured debt. Brookfield has also reportedly agreed to provide a $65 million debtor-in-possession term loan to fund the REITs current obligations, including up to $10 million to fund interest payments and other approved expenses for the property-level mortgage loans, pending the Chapter 11 cases. 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). As of April 2020, the company had 100 residential assets that had an overall value of 2Bn. Specifically, Peiffer Wolf is investigating any and all brokers and advisors who recommended ARC HIT REIT and any non-traded REITs to investors. Their broker-dealer (employing brokerage firm) has a legal obligation and regulatory obligation to supervise the financial advisors sales practices and dealings with clients. The recent filing by HIT REIT for bankruptcy protection in United St only increases the losses. These distributions could reduce the amount of capital invested in properties and could negatively impact the value of an investors investment. Out of options, a struggling hospitality trust is handing over its control to Brookfield Asset Management through the bankruptcy process. Stock Loss Recovery Lawyer. Brookfield apparently holds all of the outstanding Class C units, which are limited partner interests in the REITs operating partnership. The contingency fee we charge ranges from 20% to 40%. Did your Advisor Recommend a Hospitality REIT? If you believe you lost money because of unsuitable recommendations, including the addition of Hospitality Investors Trust REIT (HIT REIT) to your portfolio, it is important to take action. They have an obligation to make investment recommendations that are consistent with their clients risk tolerance, net worth, investment objectives and experience in the market. Brokers and financial advisors are often drawn to recommending REITs because of the high commissions associated with the transaction. The risks materialized and HIT REIT filed for bankruptcy in May 2021. The White Law Group continues to HIT REIT Files for Chapter 11 Bankruptcy Protection The White Law Group continues to investigate potential securities claims involving Blog, Current Investigations, Securities Fraud. If so, you may be able to participate in a lawsuit. The properties are under the brand names Hilton, Hyatt, and Marriott. This bankruptcy may be bad news for investors who were sold shares in HIT. Both loans bear interest at 15 percent per year. They are illiquid investments, which means that if you need to sell an asset to raise money quickly, you may not be able to do so with shares of a non-traded REIT. Moreover, it can be difficult to determine the value of a share of a non-traded REIT. You also can request a free private and confidential evaluation by clicking Free & Confidential Consult. These loans have an interest rate of 15% per year. Many investors have reported being unable to redeem their shares from non-traded REITs and remain stuck in these uncertain investments as a result. In June 2017, for instance, HITs NAV per share was estimated at $13.20 as of March 30th, 2017, a decline of approximately 38.6 percent year-over-year from the previous NAV of $21.48/share, according to The DI Wire. My in-laws lost their retirement funds to a dishonest broker. Damian BairdSuspended from the Securities Industry, Peakstone NYSE Listing Disappoints Shareholders. The REIT stopped all distributions in 2017. According to news reports, on May 13, the REITs executive officers and employees received $2.5 million in retention bonuses. Illiquid Investment Investors may have Recovery Options. HIT REIT Shares were originally sold for $25.00 per share. Unlike other reality companies, an REIT does not develop land to resell the land, but instead seeks to operate the prosperities as an investment. Thus, investors and advisors were unable to evaluate the investment portfolio prior to the initial investment. Bankrupt hotel chain Eagle Hospitality Real Estate Investment Trust alleged in a court filing that two of its big investors received $2.4 million in federal coronavirus aid on behalf of its Queen . Investors who have been sold the HIT REIT unsuitably and have lost money, as a result, could seek recovery through the FINRA (Financial Industry Regulatory Authority) arbitration process. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. The distribution of payments also carries risk. REITs collect money from investors, then use it to buy properties such as hotels, shopping centers, apartment buildings, or office buildings. Investors are unlikely to recover much of the money they invested. Did your broker recommend an investment in Hospitality Investors Trust Inc. (fka ARC Hospitality Trust)? An investor in Hospitality Investors Trust, a publicly registered non-traded REIT formerly known as American Realty Capital Hospitality Trust, has filed a lawsuit claiming gross abuse of trust by certain company executives and directors, the former property managers and advisor, former sponsor AR Global, and AR Global's senior executives. Read more about our results. Investors looking to sell often have difficulty finding a buyer, and can suffer significant losses on the sale. Non-traded REITs are known to be risky investments suitable only for a narrow band of investors. The REIT price continued to decrease over the course of these announcements. the real estate hospitality sector; as of September 30, 2017 the Company had acquired or had an interest in 148 hotel properties. Further, the fund had not even identified any properties to acquire with the offering proceeds. He was named to the Top 40 Under 40 by Daily Journal and a Rising Star in Class Actions by Law360. Fill out this form for a FREE and prompt case evaluation. It seems that many brokers sold this to investors despite it not being suitable for them. Then, during a HIT REIT quarterly investor presentation in April of 2018, the company reported. HIT REIT Hospitality Investors Trust Losses update April 8, 2021 Possible bankruptcy Have you suffered losses investing (312) 238-9650 | Fax (312) 238-8950 | (888) 637-5510 | 125 S. Wacker Drive, Suite 300, Chicago, Illinois 60606The information you obtain at this site is not, nor is it intended to be, legal advice. After all, the hospitality industry has taken a major hit during the pandemic. In materials provided to shareholders, the company reportedly attributed the decline in part to higher exit capitalization rates due to an increase in the interest rate environment since the 2016 valuation., In May 2019, HITs board announced that it the REITs NAV/share was $9.21 as of December 31, 2018, an approximate 33.6 percent decrease compared to the previous $13.87 per share NAV, as of December 31, 2017, according to The DI Wire. The bankruptcy plan, issued in June 2021, worsens the situation for investors, with only a potential for payouts, limited to $6 per share and not transferable. Broker dealers that fail to adequately disclose risks or make unsuitable investment recommendations can be held liable for investment losses in a FINRA arbitration claim. Hospitality Investors Trust Inc., a publicly registered non-traded REIT formerly known as American Realty Capital Hospitality Trust, is sponsored by AR Global. A non-traded REIT seeks to restructure $1.3 billion in unsecured debt, What Strong Gold Says About The Weak Dollar: An In-Depth Analysis On Gold Prices, Investors Watch For Earnings, Budget Battle and Recession Signs (Weekly Cheat Sheet), Yield Curve Signals Recession, Bud Loses $5B & Gold Makes New Highs (Weekly Cheat Sheet). A broker also has an ethical obligation to consider an investors risk tolerance, age, investment experience, and net worth when determining whether a certain investment is suitable for the client. Moreover, we will do our best to keep you updated and manage expectations along the way. Silver Law Group is a team of securities lawyers, forensic accountants, and support staff who are dedicated to helping investors recover losses through securities arbitration and litigation. Financial advisors (brokers) have a legal obligation and regulatory obligation to recommend only suitable investments that are appropriate for their individual clients. Those payments, which are not guaranteed, are reportedly set at a maximum amount of $6.00 a share and are generally not transferrable. Our firm is investigating now. Contact our firm to learn more about your options. In December, Hospitality Investors Trust turned the cash payment to payment-in-kind to preserve liquidity. The HIT REIT made adjustments to bonuses for key executives, as well. Holders of HIT REIT contingent value rights (CVRs) should reach out to the CVR agent Computershare Trust Company, N.A. To learn more about The White Law Group visit www.whitesecuritieslaw.com. HIT filed for Chapter 11 bankruptcy in May 2021, according to a report by The DI Wire. Shares were originally sold to most investors at $25 a share. Please provide any additional information about your inquiry. For more information on its investigation please see the following: American Realty Capital Hospitality Trust Inc. Changes Name to Hospitality Investors Trust Inc. Hospitality Investors Trust Decreases NAV close to 40%, Hospitality Investors Trust (HIT REIT) Investment Losses, Bankruptcy updated.
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