Posts tagged ‘TNP Strategic Retail Trust litigation options’

Troublesome year for Tony Thompson and Thompson National Properties

2013 has been a tough year for Tony Thompson and many who purchased investments offered by the real estate investment firm, Thompson National Properties (TNP). To kick off the year, investors in TNP Strategic Realty Trusts were informed that monthly dividends would be cut from monthly payments to quarterly payments. This followed TNP’s default on interest payments to investors in various TNP Notes.

The 2012 default gave rise to an investigation and complaint filed in 2013 by the Financial Industry Regulatory Authority (FINRA) against Mr. Thompson and TNP Securities. FINRA alleged that TNP and Mr. Thompson defrauded investors who bought the Notes sponsored by TNP. Unfortunately for Mr. Thompson, this led to his forced resignation from the board of TNP Strategic Realty Trust and the board refused to renew his contract as adviser.

In addition, the TNP Strategic Realty Trust fired their accounting firm, McGaldrey LLP., following an investigation by the Securities and Exchange Commision(SEC) that alleged Mr. Thompson misled the board of directors regarding certain loans and acquisitions.

Brokerage firms that sold investments sponsored by TNP have a fiduciary duty to perform adequate due diligence on any investment they offer.  Firms also have a duty to only recommend investments that are appropriate for their clients in light of their clients’ particular age, investment experience, net worth, and investment objectives. Given the current state of the TNP Notes, and the problems discussed above concerning TNP Strategic Realty Trust, it seems that many firms recommended these products inappropriately. If proven, investors in these products may be able to recover their losses through a FINRA arbitration claim.

The White Law Group continues to investigate the liability of brokerage firms that sold the following  TNP investments:

TNP Strategic Realty Trust Inc

TNP 12% Notes Program LLC

TNP 2008 Participating Notes Program LLC

TNP Profit Participation Program LLC

TNP Venture Fund III

To speak with a securities attorney regarding your litigation options, please call The White Law Group at (312) 238-9650 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 Boca Raton, Florida.

For more information on The White Law Group, visithttp://www.whitesecuritieslaw.com.

Tony Thompson Asked to Resign

According to Investment News, the board of TNP Strategic Retail Trust has asked for the resignation of co-CEO and founder, Tony Thompson. In addition, the board of the nontraded REIT has relieved Thompson as manager of the REIT’s properties.

Although Thompson still has connections to the REIT, according to his attorney, the REIT’s board has indicated that they are not planning on renewing Thompson contract as a real estate adviser. Thompson remains on the board, and is disputing the property management contracts.

These recent decisions by the REIT’s board follow the Financial Industry Regulatory Authority’s (FINRA) complaint against Thompson involving multiple promissory notes affiliated with Thompson’s firm, TNP Securities. According to Thompson’s BrokerCheck report, FINRA allege that Thompson and his firm, “failed to disclose or omitted material facts concerning the entities venture,” and therefore “engaged in transactions, practices or courses of business which operated as a fraud or deceit upon the purchaser” which violates the Securities Exchange Act of 1934.

The note programs involved in the FINRA complaint included the TNP 12% Notes Program LLC, the TNP 2008 Participating Notes Program LLC and the TNP Profit Participation Program LLC. To learn more about the TNP Note program’s read our previous posts available here.

The White Law Group has been following the Thompson situation for some time and continues to investigate potential FINRA claims on behalf of investors seeking to recovery investment losses.

Broker-dealers have a fiduciary duty to perform adequate due diligence on any investment. The Financial Industry Regulator Authority (FINRA) requires that broker-dealer fully disclose all the risk in any investment when making recommendations, and ensure that the investment is suitable for their client. Broker-dealers that make unsuitable investment recommendations or fail to adequately disclose risks associated with the investment may be liable for investment losses.

If you feel that your broker-dealer misrepresented TNP Strategic Retail Trust or another investment offering with Thompson National Properties, the securities attorneys of The White Law Group may be able to help you recover your losses through FINRA Arbitration. For a free consultation please call The White Law Group at (312)238-9650.

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

To learn more about The White Law Group, visit www.WhiteSecuritiesLaw.com.

Update on Thompson National Properties Investigation

According to Investment News TNP Strategic Retail Trust REIT fired their accounting firm, McGaldrey, LLP, on April 15th for failing to file two “reportable events” with the SEC last year. “McGladrey notified the REIT last August “that it would no longer be able to rely upon the representation of ” Mr. Thompson.”

According to Investment News one of the reportable events is “related to the REIT making prepayments of acquisition and financing fees to its adviser, TNP Strategic Retail Advisors LLC, which is controlled by Mr. Thompson.” It appears that McGaldrey identified the finincial discrepancy, but still failed to report the event to the SEC.

The TNP REIT has experienced numerous difficulties that appear to stem from co-chief executive and chairman of the board, Tony Thompson. As reported in our earlier post (here), Mr. Thompson is under investigation by the Financial Industry Regulatory Authority (FINRA) for allegedly failing to produce a “privileged log” requested by FINRA.

According to Investment News, “McGladrey notified the REIT last August that it would no longer be able rely upon the representations of” Mr. Thompson, according to the filing. In addition, three independent directors with TNP Strategic Reality trust allege that” Mr Thompson, “”misled the board of directors with respect to” certain loans and acquisitions, according to a separate SEC filing.” The full article is available here.

The White Group continues to follow the TNP and Tony Thompson investigation on behalf of investors. It appears that investors in TNP REIT and TNP 12 percent notes may have suffered substantial losses and The White Law Group is investigating the liability that brokerage firms that sold TNP 12 Percent Notes and TNP REIT may have for failure to perform adequate due diligence on these offerings.

To determine if your brokerage firm may be liable for your investment losses in a Thompson National Properties offering, please call the securities attorneys of The White Law Group at (312)238-9650 for a free consultation.

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

To learn more about The White Law Group, visit http://www.whitesecuritieslaw.com.

TNP Strategic Retail Trust cuts dividend.

According to a recent SEC filing, because of loan compliance issues with its lenders, TNP Strategic Retail Trust Inc. will not pay a dividend in the first quarter of 2013 and may not pay any type of distribution for 2013.

Based on reports, short-term liquidity issues, including an accelerated maturity date of loans, lender fees and the cost of potential litigation with lenders, are the cause of the cut in distributions for the REIT, which has $272 million in assets.

The SEC filing also stated that one of the REIT’s lenders, Torchlight Investors LLC, is blocking the REIT from naming a new adviser, Glenborough LLC.

This news comes shortly after Tony Thompson, the head of TNP Strategic Retail Trust and Thompson National Properties, sent a note to brokerage firms promoting the REITs strong outlook.  Specifically, Mr. Thompson apparently stated that its net asset value was 6% higher than its share price (Such a discrepancy between a REIT’s selling price and its Net Asset Value, or NAV, could be dilutive to shareholders and provide brokers with a strong sales pitch).

The White Law Group continues to investigate the liability that brokers-dealers may have for making unsuitable investment recommendation and misrepresenting the risks of non-traded REITs like TNP Strategic Trust.

Broker-dealers have a fiduciary duty to perform adequate due diligence on any investment. The Financial Industry Regulator Authority (FINRA) requires that broker-dealer fully disclose all the risk in any investment when making recommendations, and ensure that the investment is suitable given their clients age, risk tolerance, financial objectives, net worth, and investment experience.

If you feel that your broker-dealer misrepresented TNP Strategic Retail Trust or another investment offering with Thompson National Properties, the securities attorneys of The White Law Group may be able to help you recover your losses through FINRA Arbitration. For a free consultation please call The White Law Group at 312-238-9650.

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

To learn more about The White Law Group, visit http://www.whitesecuritieslaw.com

Update on Securities Fraud Investigation Involving TNP Strategic Retail Trust and Thompson National Properties Investments

Have you suffered investment losses in TNP Strategic Retail Trust or a Thompson National Properties investment? If so, the following information may be of assistance to you.

TNP Strategic Retail Trust, Inc is a non-traded REIT sponsored by Thompson National Properties, LLC and launched in 2008. According to their website, TNP Strategic Retail Trust primarily invests in income producing retail properties throughout the Western United States, and in real estate assets such as mortgages, mezzanine, bridge, and other commercial real estate loans. “TNP Strategic Retail Trust has acquired 21 shopping centers in 14 states containing approximately 2.2 million square feet at an overall purchase price of more than $290 million since November 2009.” As of January 11, 2013, the REIT has issued 10,944,230 shares of common stock from the initial public offering of 100 million common shares.

The TNP Strategic Retail Trust is organized as an UPREIT and operates through an operating partnership, TNP Strategic Retail Operating Partnership, LP.  According to the prospectus, the advisory company, TNP Strategic Retail Advisor, LLC, selects investments for the REIT based on specific investment objectives and criteria approved by the board of directors.

The term UPREIT is short for Umbrella Partnership Real Estate Investment Trust. The UPREIT structure allows owners of commercial real estate property to form a REIT by combining the properties from existing limited partnerships.  By transferring property to the operating partnership, as opposed to selling directly to the REIT, property owners exchange the property for limited partnerships units and are able to put off capital gains taxes.

According to TNP Strategic Retail Trust’s website, the “UPREIT structure gives us an advantage in acquiring desired properties from persons who may not otherwise sell their properties because of unfavorable tax results.”

However, many concerns have been raised about the future of TNP Strategic Retail Trust as a result of several major changes the REIT has gone through in 2013.

January alone was an active month for TNP Strategic Retail Trust. According to SEC Filings, the REIT announced that they “may not be in compliance with certain provisions related to two secured loans totaling approximately $67.2 million.”  As a result of the loan default the redemption program was suspended, and distributions were reduced to quarterly payments as opposed to monthly payments. In addition, the REIT is actively negotiating with Glenborough, LLC to become their new advisor.

February 7, 2013 marked the end of TNP Strategic Retail Trust initial offering with 88,966,650.25 common shares unsold. Since then, TNP has withdrawn a proposed follow-on public offering of $900 million in common stock due to current market conditions.

According to TNP Strategic Retail Trust’s website, as of November 9, 2012, the board of directors estimated the value of common stock at $10.60. Unfortunately, it is unlikely that investors would be able to sell their shares for the estimated value because of the lack of a secondary market. The prospectus notes that “You should not rely on the estimated value per share as being an accurate measure of the current value of our shares of common stock or in making an investment decision.”

Some of the risk factors discussed in the prospectus are listed below:

  • “We may incur debt exceeding 75% of the cost of our assets in certain circumstances.”
  • “There is no trading market for shares of our common stock and we are not required to effectuate a liquidity event by a certain date. As a result, it will be difficult for you to sell your shares of common stock and, if you are able to sell your shares, you are likely to sell them at a substantial discount.
  • “You may be more likely to sustain a loss on your investment because our sponsor does not have as strong an economic incentive to avoid losses as does a sponsor who has made significant equity investments in its company.”
  • “All of our cash distributions to date have been made from proceeds from this offering. Distributions are not guaranteed, may fluctuate, and may constitute a return of capital or taxable gain from the sale or exchange of property.”
  • “To date, all of our cash distributions paid have been made from offering proceeds and constituted a return of capital.”

The lack of liquidity and secondary market are inherent problems of non-traded REITs.  Despite the numerous risks many broker-dealer may have misrepresented TNP Strategic Retail Trust to clients.

Non-traded REIT’s offer extremely high sales commission to broker-dealers. TNP offers 7% sales commission, which is 3 to 4 times higher than more tradition investments sold on stock exchange.  This higher commission may explain broker-dealers motive for recommending this investment to unsuitable investors.

The White Law Group continues to investigate the liability that brokers-dealers may have for making unsuitable investment recommendation and misrepresenting the risks of non-traded REITs like TNP Strategic Trust.

Broker-dealers have a fiduciary duty to perform adequate due diligence on any investment. The Financial Industry Regulator Authority (FINRA) requires that broker-dealer fully disclose all the risk in any investment when making recommendations, and ensure that the investment is suitable given their clients age, risk tolerance, financial objectives, net worth, and investment experience.

If you feel that your broker-dealer misrepresented TNP Strategic Retail Trust or another investment offering with Thompson National Properties, the securities attorneys of The White Law Group may be able to help you recover your losses through FINRA Arbitration. For a free consultation please call The White Law Group at 312-238-9650.

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

To learn more about The White Law Group, visit http://www.whitesecuritieslaw.com