Written by The White Law Group August 25, 2021 The trust doesnt have enough cash to fund its duties, and Brookfield, its largest investor, might be its only source of additional liquidity, the publication reported. Shares were originally sold to most investors at $25 a share. If so, the securities attorneys at The White Law Group may be able to help you to recover your losses by filing a FINRA dispute resolution claim against your brokerage firm. Investment Losses? The private REIT, which owns hotels branded by Hilton, Marriott and Hyatt, on Tuesday filed a lawsuit in New York against six insurers over a "sham investigation" meant to delay and deny up to. 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). 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. HIT REIT is another stark reminder of how disastrous non-traded REITs can be for investors. Real estate investment trusts (REITs) are. Copyright 1996-2023 | Policies & Disclaimers, Representing Personal Injury Clients Since 1955, Levin Papantonio Rafferty - Personal Injury Law Firm, Martindale-Hubbell Preeminent Woman Attorney, $380 Million in Environmental Pollution Case, How to Recover Losses in Hospitality Investors Trust REIT, Escambia County School District Hosts Special Workshop to Explore Social Media Litigation, Brian Barr Again Picks Up the Fight Against Skanska in Oral Arguments, The Risks of Overconcentration in Pot Stocks, Retirees Are Suing for Investment Losses Allegedly Caused by Quincy, IL Area Financial Advisor and Broker Jeff Kennedy. Our advisor has no operating history and is a newly formed entity which has no experience operating a public company., There is no guarantee that distributions will be paid. Hospitality Investors Trust is negotiating a deal that would give Brookfield financial control over its 100 hotels as part of a possible Chapter 11 filing, Bloomberg News reported. 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. 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. You can access the Main Case Docket through the website maintained and maintained by theUnited States Bankruptcy CourtDistrict of Delaware. Contact our firm to learn more about your options. Damian BairdSuspended from the Securities Industry, Peakstone NYSE Listing Disappoints Shareholders. We pride ourselves on providing quality legal services to our clients and handle securities fraud cases throughout the country. This field is for validation purposes and should be left unchanged. This may be years after you have made your investment. Brokers and financial advisors have a duty to the people they serve to make only suitable investment recommendations. Get a free and confidential consultation. 2022 Peiffer Wolf Carr Kane Conway & Wise, LLP. Each engagement agreement includes the details of the fee arrangement. HIT REIT believes that additional liquidity from a source other than property operations the company requires may not be available on favorable terms or at all., The company notes that the objective of the limited partnership amendment with Brookfield is to preserve the companys cash position as it continues discussions with the Brookfield investor regarding a holistic solution to the companys liquidity dilemma.. Compared to traditional investments, such as stocks, bonds and mutual funds, REITs are significantly more complex and often better suited for sophisticated and institutional investors. Out of options, a struggling hospitality trust is handing over its control to Brookfield Asset Management through the bankruptcy process. Thousands of investors who were sold HIT have suffered severe losses. REITs like this are only suitable for savvy and wealthy investors, because these complex investment products are often risky and highly illiquid, meaning investors may be stuck and not able to access their money. 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. Many of our clients have lost a significant portion of their net worth as the result of the negligence of their financial professional. It seems that many brokers sold this to investors despite it not being suitable for them. 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. The Securities and Business Litigation team at Levin, Papantonio, Rafferty, Proctor, Buchanan, OBrien, Barr & Mougey, P.A. The Company operates as a public, non-traded real estate investment trust ("REIT"), meaning that it is: "public" because it is registered with the Six of the hospitality industry's largest hotel companies are named in a new class-action lawsuit, which claims to have uncovered an antitrust scheme to reduce competition and raise consumer prices. The bankruptcy court must enter a confirmation order no later than June 23, 2021. These loans have an interest rate of 15% per year. Ashford Hospitality Trust gave up a portfolio of 13 hotels as it struggled to stem losses and fumbled with forbearance agreements in an effort to avoid defaults. Hospitality Investors Trust (HIT), formerly known as American Realty Capital Hospitality Trust, is a non-traded REIT. These professionals are ethically bound to tell their clients about the risks associated with recommended investments. Did your broker recommend an investment in Hospitality Investors Trust Inc. (fka ARC Hospitality Trust)? The company has yet to declare a Net Asset Value for 2020, but as of December 31, 2019, it was $8.35 per share, a 9.3% decrease from the 2018 NAV. Rosenheim is a city in Bavaria, Germany.It is an independent city located in the centre of the district of Rosenheim (Upper Bavaria), and is also the seat of its administration.It is located on the west bank of the Inn at the confluence of the rivers Inn and Mangfall, in the Bavarian Alpine Foreland.It is the third largest city in Upper Bavaria with over 63,000 inhabitants. Further, HIT REIT said that lower estimates of occupancy, higher labor costs, and sales and marketing were offset by lower discount rate and capitalization rate estimates, driven by tightening market spreads and progress on its brand-mandated property improvement plans. At the moment an investor purchased HIT, they were automatically at a significant disadvantage due to the fees and commissions charged. The result is a long way from where the REIT started in 2014 when it raised $903 million from investors. Further, some brokers allegedly sold the HIT REIT to retirees or elderly clients close to retirement. Further, in February of 2019 the Board of Directors announced that it suspended the Companys Share Repurchase Program. Blog, Current Investigations. As of April 2020, the company had 100 residential assets that had an overall value of 2Bn. A chapter 11 restructuring plan was approved by a Delaware bankruptcy court in July 2021. These distributions could reduce the amount of capital invested in properties and could negatively impact the value of an investors investment. Their broker-dealer (employing brokerage firm) has a legal obligation and regulatory obligation to supervise the financial advisors sales practices and dealings with clients. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. 1519 Robert C. Blakes Sr Dr, 1st Floor Further, the fund had not even identified any properties to acquire with the offering proceeds. Many investors are not fully aware of the problems and risks associated with these investments before purchasing them. HIT was originally a blind pool offering, further making the investment highly speculative. Shares traded on CTT Auctions, a secondary market for non-traded REITs in September for $0.66 per share. The bankruptcy could leave investors who were sold shares in HIT with no real recovery of their investments, and the bankruptcy will undoubtedly leave many investors with substantial losses. Hospitality Investors Trust (HIT) is a publicly registered non-traded real estate investment trust (REIT), formerly known as American Realty Capital Hospitality Trust. The recovery of millions of dollars of money lost by investors due to the negligent and fraudulent actions of some of the largest firms on Wall Street is a part of the work done by Haselkorn & Thibaut. All copies must include this copyright statement. To learn more about the firms investigation, please see: Hospitality Investors Trust Decreases NAV close to 40%. The REITs bankruptcy plan involved the cancellation of common stock shares in exchange for shareholders right to receive nontransferable contingent cash payments not to exceed $6/share. The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. The trouble with non-traded REITs, like Hospitality Investors Trust Inc., is that they are complex and inherently risky products. The lawsuit, which has been filed by class-action law firm Hagens Berman, contests that Choice Hotels International, Hilton, Hyatt Hotels . Its self-tender offer (that is, an offer to buy its own shares) set a much lower price for shares. Soon after, in May 2021, a chapter 11 bankruptcy protection was filed by HIT. This meant that the fund had not had any net income and did not own any properties. Carlson Law represents investors involved in claims against financial advisors and investment firms throughout the United States. Eileen is involved in the firms securities practice and has over a decade of experience in the legal world. If you invested in Hospitality Investors Trust REIT, Contact Peiffer Wolf for a FREE CONSULTATION by calling 585-310-5140 of by filling out a Contact Form on this website. AR Capital has been subjected to significant regulatory action and fines and the former CFO was even sentenced to federal prison. Even worse, HIT REIT is now in bankruptcy. These increases were mainly a result . Did your Advisor Recommend a Hospitality REIT?

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