January 10, 2018 Comments (0) Blog, Current Investigations

American Realty Capital Healthcare Trust III –Liquidating Distribution

American Realty Capital Healthcare Trust III
(Last Updated On: January 10, 2018)

Investigating Potential Claims – American Realty Capital Healthcare Trust III

American Realty Capital Healthcare Trust III is a publicly registered non-traded real estate investment trust sponsored by AR Global. The REIT commenced its $3 billion initial public offering in August 2014 and raised $168 million prior to the cancellation of its offering in 2015 following the Nicholas Schorsch accounting scandals.

According to SEC filings, American Realty Capital Healthcare Trust III has revised its net asset value per share following the liquidating distribution paid to stockholders on January 5th.

The independent directors of the board updated the July 2017 NAV per share of $17.64 to $1.89 per share as of January 5th. The REIT also terminated its distribution reinvestment plan on January 5th and deregistered its remaining unsold common stock.

According to the proxy statement filed in October 2017, the company estimated that shareholders would receive $17.67 to $17.81 per share in one or more liquidating distributions. Shares were originally purchased for $25.00 each.

This estimated range was greater than the July NAV per share due primarily to additional estimated cash from operations resulting from a later estimated closing date, according to the company.

There is no guarantee as to the exact amount of net liquidation proceeds that will be available for distribution to stockholders, as the NAV was adjusted solely to give effect to the initial liquidating distribution.

Securities Investigation

The White Law Group is investigating potential securities claims involving broker dealers who may have unsuitably recommended American Realty Capital Healthcare REIT III to investors.

REITs are complex, high risk products that are not suitable for most investors. Many brokerage firms target investors that were retired or near retirement, claiming the potential income that a REIT may provide.

Unfortunately, some brokerage firms failed to disclose that often distributions are often merely a return of principle…it is also not uncommon for REITs to borrow money in order to make distributions.

Another problem with REITs is the lack of liquidity. Non-traded REITs are not sold on the public market. This prevents shares from being sold quickly and forces investors to search for a secondary market that is often very limited. The secondary market price is almost always significantly below the purchase price.

Brokerage firms have a fiduciary duty to its clients to perform adequate due diligence on an investment prior to recommending it for sale. They must ensure that any investment recommended is appropriate in light of the investor’s age, investment experience, net worth, and investment objectives. Given what is now known about non-traded REITs, it is clear that certain of the brokerage firms that sold this investment failed in its fiduciary duty to its clients.

Free Consultation

Have you suffered losses investing in American Realty Capital Healthcare Trust III or another AR Global offering? If so, the securities attorneys at The White Law Group may be able to help you. You may be able to recover your losses through FINRA arbitration. Please call The White Law Group for a free consultation 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 White Law Group, please visit http://www.whitesecuritieslaw.com.

 

 

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