May 14, 2016 Comments (0) Blog

Breitburn Energy Partners: Investor Information

(Last Updated On: June 14, 2016)

Have you suffered losses investing in Breitburn Energy Partners, LP?  If so, the following information may be valuable for you as you evaluate what to do next.

Breitburn Energy Partners LP (NASDAQ: BBEP) is an independent oil and gas master limited partnership (MLP) focused on the acquisition, exploitation, development and production of oil and gas properties in the United States.

The company recently announced that it has filed for Chapter 11 bankruptcy (Chapter 11 is a reorganization meaning the company remains an ongoing concern).  In a statement related to the bankruptcy, the company said the continued decline of oil and natural gas prices has made Breitburn’s existing debt burden “unsustainable,” though the company’s portfolio of diverse assets “continues performing in line with our expectations.”  For information on the Breitburn Energy Partners bankruptcy, see http://www.wsj.com/articles/breitburn-energy-partners-files-for-chapter-11-bankruptcy-1463400009.

The bankruptcy comes on the heals of a dramatic decline in the price of the shares, having dropped more than 97% in the last year alone.  For the full price history, visit http://www.bloomberg.com/quote/BBEP:US.

Unfortunately for many investors, this type of decline was not thought possible as many investors did not fully understand the risks of oil and gas MLPs like Breitburn Energy Partners.  Not only are the investments’ performance directly tied to the price of oil  (which has dropped dramatically) but the investments structure that requires that 90% of revenue be paid out as income causes further erosion to the investments in a time of a decline.  For more detail on the risks of oil and gas MLPs, visit http://www.wallstreetdaily.com/2015/08/18/energy-mlps-high-risk/.

Many investors were also told that price fluctuations may occur but that the benefit of MLPs is that the distributions were consistent and therefore appealing to retired income seeking investors.  Of course, investors in Breitburn Energy Partners have learned that this is not always the case.  For information on Breitburn Energy Partners distributions (and the likelihood that the company will pay distributions going forward) there are a couple of good links to look at.  First, is Breitburn’s own website at http://www.breitburn.com/distributions.  The other is a recent SeekingAlpha article (see http://seekingalpha.com/article/3965445-breitburn-energy-partners-just-die).

One other negative consequence of these declining investments has to do with the tax considerations,  as many MLP investors are finding that they are getting tax bills even though the investments have been hammered and the income has dropped or even stopped.  For a full understanding of how that has occurred, visit http://seekingalpha.com/article/3961042-breitburn-energy-partners-tax-implications-result-avoidance-voluntary-restructuring

The White Law Group continues to investigate the liability that brokerage firms may have for recommending Breitburn (see http://www.whitesecuritieslaw.com/2015/12/15/helping-investors-in-breitburn-energy-partners/).

Brokerage firms are required to perform adequate due diligence to evaluate whether the investments they recommend are suitable in light of the client’s age, net worth, risk tolerance, investment experience, and investment objectives. Firms that fail to perform adequate due diligence, or that make unsuitable recommendations, can be held responsible for losses in a FINRA arbitration claim.  The White Law Group believes certain financial advisors have been recommending MLPs improperly to income seeking retired investors – focusing on the income potential of the investments while downplaying or ignoring the risks.

If you suffered losses investing in Breitburn Energy Partners at the recommendation of your financial advisor and would like a free consultation with a securities attorney, please call The White Law Group at 888-637-5510.

The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group’s and it’s representation of investors, visit http://www.whitesecuritieslaw.com.