December 20, 2016 Comments (0) Blog, Current Investigations

Dakota Plains Holdings Files for Bankruptcy

Dakota Plains Holdings
(Last Updated On: April 18, 2017)

Dakota Plains Holdings Investment Losses

Have you suffered investment losses in Dakota Plains Holdings, Inc? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

Dakota Plains Holdings, Inc. is an integrated midstream energy company operating the Pioneer Terminal with services that include outbound crude oil storage, logistics, and rail transportation and inbound frac sand logistics, according to their website. Dakota Plains was founded in 2008 and is headquartered in Wayzata, Minnesota.

The company filed for Chapter 11 bankruptcy on December 20 and plans to sell substantially all of its assets to a Houston-based company for $8.55 million, according to Minneapolis Star Tribune.

Dakota Plains, which loads oil into rail cars in North Dakota, has been losing money fast and stock has been trading at less than 1 cent. Six of Dakota Plains’ subsidiaries filed Chapter 11 Tuesday along with their parent company in U.S. Bankruptcy Court for the District of Minnesota.

Dakota Plains went public in March 2012 and its shares quickly hit $12. By October of that year, though, they had fallen below $5 and dwindled to around $2 by early 2015 before virtually disappearing.

SEC Charges

Co-founders — Ryan Gilbertson and Michael Reger — have been targets of a federal securities investigation surrounding the company’s initial public offering and various loans made to them in the company’s early history.In November, the Securities and Exchange Commission accused Gilbertson of multiple violations of securities laws, claims which Gilbertson denies. In addition, the SEC announced that Reger had settled separate claims against him and agreed to pay $8 million, without admitting or denying guilt.

BioUrja Trading of Houston has made a “stalking horse” bid of $8.55 million for Dakota Plains, essentially setting a floor price for the company’s assets during its bankruptcy proceeding. Other bidders could emerge. In its bankruptcy filing, Dakota Plains listed assets of $3.1 million and debts of $75.4 million.

Its largest creditor is SunTrust Bank, which is owed $63.2 million. Dakota Plains said it expects to receive $2 million in post-bankruptcy financing from SunTrust, which will enable it to continue engaging in business.

A deadly oil train derailment in Canada, the continued decline in oil prices and other factors have done a number on the company’s bottom line. Dakota Plains posted a net loss of $25 million in 2015 and a net loss of $5.1 million through the first half of this year.

Broker dealers are required to perform adequate due diligence on all investment recommendations to ensure that each investment is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.

If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be liable for investment losses.

Recovery of Investment Losses

To determine whether you may be able to recover investment losses incurred as a result of your purchase of Dakota Plains Holdings or another oil and gas investment, please contact The White Law Group at 1-888-637-5510 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 Vero Beach, Florida. For more information on the firm, visit www.WhiteSecuritiesLaw.com.