December 1, 2016 Comments (0) Blog, Current Investigations

Linn Energy Update

KBS REIT
(Last Updated On: February 8, 2017)

Linn Energy Investment Losses

Are you concerned about your investment losses with Linn Energy? If so, The White Law Group may be able to help you by filing a FINRA arbitration claim against the brokerage firm that sold you the investment.

An independent oil and natural gas company, Linn Energy LLC (OTCMKTS:LINEQ) acquires and develops oil and natural gas properties in the United States. Its properties are located in the Hugoton Basin, the Rockies, California, east Texas and north Louisiana, the Mid-Continent, Michigan/Illinois, the Permian Basin, and south Texas.

Linn Energy LLC has a very similar story to another company we told you about, Breitburn Energy Partners LP. Both are upstream MLPs in the energy patch that were given too much access to very easy debt when oil prices were up at $105/bbl and projected to rise.

Like Breitburn, Linn Energy also filed for Chapter 11 protection in May of this year, and have mostly waited for cancellation of shares.  Breitburn was pressured by the SEC to form an equity committee and assign some value to shares.

According to a Linn Energy filing with the bankruptcy court on Oct 7, there is a material definitive agreement stipulating that all existing equity interests of the company will be extinguished without recovery.

As of December 31, 2015, the company had proved reserves of 4,488 billion cubic feet equivalent; and operated 19,294 gross productive wells. Linn Energy, LLC was founded in 2003 and is headquartered in Houston, Texas.

Linn Energy Files Bankruptcy

An unusual twist in this particular case was the Company’s August offer to exchange each outstanding unit of LINN Energy, LLC for one LinnCo share upon the terms and conditions of the Prospectus/Offer to Exchange dated April 26, 2016, and the accompanying Amended and Restated Letter of Transmittal.

The purpose of the Exchange Offer was to permit holders of LINN units to maintain their economic interest in LINN through LinnCo, an entity that is taxed as a corporation rather than a partnership, which may allow LINN unitholders to avoid future allocations of taxable income and loss, including cancellation of debt income, that could result from future debt restructurings or other strategic transactions by LINN. LinnCo now reportedly owns approximately 71% of LINN’s issued and outstanding units.

Earning a current market cap value of $36.1M, LINEQ is undergoing pains of Chapter 11 restructuring where total assets claimed by the company amount to over $7.5 bln against standing referenced debt over $7.67 bln.

The White Law Group is investigating the liability that brokerage firms and financial advisors may have for recommending high risk MLPs, like LINN Energy and Breitburn Energy to their clients. Brokerage firms that recommend energy investments are required to perform adequate due diligence on the investments to ensure a reasonable likelihood of success, and to evaluate whether the investments are suitable in light of their client’s age, net worth, investment experience, risk tolerance, 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.

Recovery of Investment losses

If you suffered losses investing in LINN Energy and would like to discuss your litigation options, please call The White Law Group at (888) 637-5510 for a free consultation.

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. The firm represents investors throughout the country in FINRA arbitration claims against their brokerage firm.

For more information on The White Law Group, visit www.whitesecuritieslaw.com.