Federal Judge Approves $91.3 Million in GWG Holdings Bankruptcy Settlements
A federal bankruptcy judge in Houston has approved $91.3 million in settlements from several professional firms, company founders, and former executives tied to the collapse of GWG Holdings Inc. As reported by InvestmentNews, U.S. Bankruptcy Judge
Christopher Lopez signed off on the agreements as part of the ongoing Chapter 11 case. The approvals included a $30 million settlement from Mayer Brown, GWG’s former legal counsel, resolving claims that the firm failed to provide proper legal advice and maintained undisclosed conflicts of interest. Mayer Brown agreed to settle without admitting liability.
Texas-based accounting firm Whitley Penn reached an $8.5 million settlement over allegations of audit malpractice involving its work for GWG. Claims centered on the firm’s handling of related-party disclosures and valuation issues, as well as its role in accounting decisions tied to GWG’s complex dealings with Beneficient, a financial services firm specializing in alternative assets. Like Mayer Brown, Whitley Penn admitted no wrongdoing.
Former GWG founders Jon R. and Steven F. Sabes also agreed to a $2.3 million settlement. Additionally, a $50.5 million agreement with GWG’s former directors and officers, announced in March, received final court approval. Michael Goldberg, trustee for the GWG Litigation Trust, is overseeing efforts to recover funds for creditors. Before filing for bankruptcy in 2022, GWG raised approximately $1.6 billion in so-called L Bonds, securities backed by life settlements, sold to retail investors through dozens of broker-dealers.
InvestmentNews reports that the settlements will fund the litigation trust’s recovery efforts for bondholders and other creditors impacted by GWG’s bankruptcy.
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