February 7, 2018 Comments (0) Blog, Current Investigations

GPB Capital Holdings Embroiled in Heated Lawsuit

GPB Capital Lawsuit, Featured by Top Securities Fraud Attorneys, The White Law Group

Alt Investment Sponsor GPB Capital Sues Former Partner

According to a complaint filed in New York Supreme Court, GPB Capital Holdings is reportedly involved in a lawsuit involving a former business partner who allegedly reneged on the sale of $40 million worth of auto dealerships to GPB.

GPB Capital Holdings and a series of its related investment funds sued Patrick Dibre last July. Dibre reportedly owned auto dealerships in the New York area.

Between December 2013 and April 2015, GPB allegedly advanced Dibre $42 million for auto dealerships he purportedly never delivered, according to the lawsuit. Dibre allegedly failed to provide the required notices to start the sales process of five dealerships, states the complaint.

GPB Capital is a New York-based alternative asset management firm focusing on acquiring income-producing private companies. According to industry sources, GPB raised between $600 million to $800 million from investors through sales of reps at independent contractor broker-dealers.

According to its website, the company claims it has raised $1.3 billion and owns more than 100 companies in its various portfolios. It appears that brokers collect a 7% commission for selling these high-yield Regulation D private placements.

GPB Capital Update on March 1, 2019

According to reports, GPB Capital sent a letter to investors disclosing that authorities made an unplanned visit to their New York offices and collected materials at the end of February.

In the letter, the company claims to be “cooperating with inquiries from various authorities and have been producing requested documents on a rolling basis.”

The letter further stated that “On February 28, 2019, authorities came to GPB Capital’s New York offices and collected material. We believe the visit, while unscheduled, was a continuation of this process and we will remain cooperative with any inquiries.”

Update on May 6, 2019

According to an article in Investment News on May 2, 2019, GPB Capital Holdings has shown no signs of filing financials a year after stating its intention to take a break in raising money while it straightens out the accounting and financial statements of two of its existing funds.

Dealing with proper accounting standards was allegedly the reason for the delay last year. What’s the hold up now? According to Investment News, “The company won’t say, but keep in mind that GPB’s CEO and lead partner, David Gentile, is a CPA. That means even the accountant isn’t doing the accounting at GPB.”

This begs the question, what is the real value of these GPB investments? Investors are apparently not the only ones with questions.

The Trouble with Reg D Private Placements

Private placements are a means for companies to raise capital through the sale of equity or debt securities without having to register their securities with the SEC. These investments are often riskier and more complicated than traditional investments, and are only suitable for high net worth, sophisticated investors.

Brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation, despite the risks.

The White Law Group continues to investigate the liability that brokerage firms may have for recommending GPB Capital Holdings offerings to clients.

Specifically, we are investigating the following offerings:

GPB Cold Storage
GPB Automotive Fund
GPB Automotive Income
GPB Holdings II
GPB Holdings III
GPB Waste Management
GPB NY Development

Broker dealers are required to perform adequate due diligence on all investment recommendations they make. They must 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 through FINRA arbitration.

Free Consultation

If you have suffered investment losses in a GPB Capital offering, the securities attorneys at The White Law Group may be able to help you. Please contact The White Law Group at 1-888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. For more information on the firm, visit www.WhiteSecuritiesLaw.com.

 

Click here for your FREE consultation.