It is being reported that Thompson National Properties LLC has ducked a default on one of its note programs, but investors will be getting less of a payout than they were promised.
Thompson National Properties is the sponsor of a nontraded real estate investment trust, TNP Strategic Retail Trust Inc. In a filing with the Securities and Exchange Commission last week, the REIT reported that a majority of note holders in the program voted to modify the terms, moving it out of default.
The TNP 12% Notes Program LLC suspended interest payments to investors in July but said it intended to restart them in 2013.
The SEC filing also stated that investors will see sharply lower interest payments and the notes’ maturity has been extended until 2016.
The TNP 12% Notes Program raised $21.5 million from 418 investors in 2008 and 2009. The purpose of the notes was to meet general obligations of the sponsor. In July, Thompson National Properties said it would pay investors the remaining interest and principal on or before the maturity date of June 2013.
Thompson National Properties’ largest investment program is its REIT, TNP Strategic Retail Trust, which has assets valued close to $200 million.
Although it appears that Thompson has avoided default at this time, this is certainly not good news for investors and if the firm follows the pattern of REITs that preceded it, it is certainly possible that further negative news could be in the offing.
The White Law Group continues to investigate REIT investments like Thompson National Properties, and specifically, the liability that brokerage firm’s have for selling these products. Brokerage firms and financial advisors have a fiduciary duty to perform adequate due diligence on any investment they recommend and to ensure that such recommendations are appropriate for their client in light of that particular clients’ age, income, investment experience, investment objectives, and net worth.
Based on what is now known about REITs, and given the high commissions financial advisors receive for pushing these products, it now appears that the firms that sold these products did so because of the high commission structure and not because the investments were always in the best interests of their clients.
Fortunately for investors, any losses sustained in these products may be recoverable through the FINRA arbitration process. FINRA is the regulatory body for the securities industry and they have a dispute resolution forum for resolving securities disputes.
If you purchased TNP 12% Notes or another Thompson National Properties investment and are interested in information regarding your litigation options, please call the securities attorneys of The White Law Group at 312/238-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida. The firm has represented dozens of REIT investors in FINRA arbitrations to recover their losses in these high-risk, illiquid investments.
For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.