Potential Recovery of Cornerstone’s CIP Leveraged Fund Advisors Investment Losses – Investigation UpdateFriday, November 11th, 2011
The White Law Group is continuing to investigate and pursue investment losses in Cornerstone’s CIP Leveraged Fund Advisors (CLFA) on behalf of damaged investors. Our firm has been monitoring Cornerstone Real Estate Funds’ various REITs and Funds and has spoken to many concerned investors about filing FINRA arbitration claims to recover their investments that in many cases have significantly decreased in value or have suffered a total loss.
The CIP Leveraged Fund Advisors (CLFA) appears to be the most problematic of all of the Cornerstone Real Estate Fund products as it currently is estimated to have no value. The CIP Leveraged Fund Advisors (CLFA) is a fund that was established by Cornerstone to advise and thus is tied to the growth and performance of 3 other Cornerstone leveraged funds. Those investments are the Cornerstone Healthcare Plus REIT (CHP REIT), Cornerstone Healthcare Real Estate Funds (CHREF), and Meadowbrook Healthcare Properties (MHP).
We reported in October that investors in the CIP Leveraged Fund Advisors were informed that their investment, according to Cornerstone itself, was currently believed to be a total loss. The letter to investors, dated August 24, 2011, stated, “…given the information we have today…we have determined to reduce the estimated value of your investment from $1.00 to $0.00 per unit of membership interest.” That letter indicated that the CLFA will continue to pursue avenues to increase the value, but that the leveraged funds it is advising are struggling and that Cornerstone was not particularly optimistic about the future chances of the value of the CLFA increasing.
A more recent letter to investors in the CIP Leveraged Fund Advisors, dated November 3rd, 2011, indicates that the estimated value of units of CLFA is still zero and that, while hope remains for the leveraged funds it advises, the future is very much in doubt.
The letter states that “…CLFA’s income is dependent on the fees received for its service of advising leveraged real estate funds.” and that the “The income provided by CHREF and MHP is insignificant to the overall income of the CLFAA due to the small size of these funds.” That leaves one remaining fund, the Cornerstone Healthcare Plus REIT (CHP REIT). However, the future of that fund is not too much brighter for CLFA investors. The letter from Cornerstone states that the “CLFA has accordingly been dependent of the growth of CHP REIT in order to meet the expenses of CLFA and reach targeted future growth. However, due to decisions made by the CHP REIT Independent Board of Directors, notably to cease sales of shares in CHP REIT, future growth of CHP REIT and the continued flow of fees to CLFA are very much in doubt.”
Cornerstone Real Estate Funds re-emphasizes based on that information that, “…in light of these developments, we believe your investment in CLFA has no current value.” It should be noted that CLFA is continuing to make efforts to pursue opportunities within the confines of the bleak situation, but admit “There can be no assurances that these efforts will be successful…”
If you have invested in the Cornerstone CIP Leveraged Fund Advisors (CLFA), or another Cornerstone REIT or fund, and would like to speak to a securities attorney about the potential to recovery your investment losses through FINRA arbitration please call our Chicago office at 312-238-9650.
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 Boca Raton, Florida.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.
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