October 19, 2017 Comments (0) Blog, Current Investigations

OHA Investment Corporation BDC Securities Investigation

OHA Investment Corporation
(Last Updated On: October 19, 2017)

OHA Investment Corporation- ‍Castex and its affiliates file for bankruptcy

The White Law Group is investigating potential claims involving OHA Investment Corporation.

OHA Investment Corporation (NASDAQ: OHAI) is a business development company “designed to provide its investors with current income and capital appreciation,” according to their website. OHAI focuses primarily on providing creative direct lending solutions to middle market private companies across industry sectors. OHAI is externally managed by Oak Hill Advisors, L.P., a leading independent investment firm with approximately $31 billion under management.

According to SEC filings this week, OHA notified shareholders that one of their holdings, Castex Energy Partners, has filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code on October 16, 2017.

OHA is a holder of preferred limited partnership units in Castex Energy 2005, L.P. Castex was acquired prior to September 30, 2014, when Oak Hill Advisors, L.P. assumed management of the Registrant. Castex Energy Partners engages in the exploration, development, production and acquisition of oil and natural gas properties.

According to filings, OHA exercised a “put right” on July 1, 2016 with respect to all of its preferred limited partnership units. The “put right” remains unsatisfied by Castex to date.

Castex Energy Partners files for Bankruptcy.

On October 16, 2017, Castex and affiliates announced it has filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. According to the filing, Castex and its affiliates in bankruptcy have entered into a restructuring support agreement.  The plan does not provide for any recovery to the holders of preferred limited partnership units of Castex, including those preferred limited partnership unit holders who have exercised their put rights.

What is a Business Development Company?

A Business Development Company (“BDC”) is a type of investment company that invests in small and mid-sized businesses. Investors can buy shares in a BDC, and the money from their investments are used to fund the businesses. In turn, investors can profit from dividends paid on their investments, or, in some cases, the sale of their shares.

Like all investments, BDCs do not come without risks. Distributions that may not be guaranteed in frequency or amount, and limited operating history are just a few risks that investors take on when investing in a BDC.

Business Development Companies can be a good investment for the right investor, along with a diversified portfolio and sufficient due diligence. BDCs should only be recommended to those investors who are able to sustain substantial losses.

If you invested in OHA Investment Corporation or another BDC 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 fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.  For more information on the firm and its representation of investors, visit http://www.whitesecuritieslaw.com.