Better Housing Foundation Shoreline Portfolio Project, Series 2016A, 2016B, 2016C Investment Losses
Illinois Finance Authority Multifamily Housing Revenue Bonds Default
According to reports, the Shoreline Portfolio Project issued by the Better Housing Foundation (BHF) reportedly defaulted in June after issuing $13.6 million in 2016 for Lindran Properties LLC. The bonds originally carried ratings of BBB, BBB-, and no rating, but now are junk-rated.
According to a voluntary disclosure in April 2019 on the Municipal Securities Rulemaking Board’s EMMA website, ”Because of the condition of the facilities, the financial performance of the portfolios has been strained. As a result, none of the portfolios will be able to make the debt service payments due on the bonds on June 1, 2019.”
Lindran Properties LLC is reportedly the owner of 13 multifamily residential rental facilities. According to the disclosure, the City of Chicago reportedly has “cited nearly all of the individual properties contained in the Portfolios for numerous code violations stemming from the lack of maintenance that was necessary during the tenure of the prior Board or pre-existing conditions present when the current board took over BHF.”
Matters are further complicated by city code violations, dwindling occupancy, and the need for a cash infusion to fund repairs.
According to reports, Lindran Properties LLC filed for bankruptcy at the end of January and is seeking the sale of $13.6 million of the Shoreline portfolio housing stock in a bid process that begins at $3.9 million sale price. UMB Bank NA is the successor trustee, having taken over from Wilmington Trust NA.
Investigating Potential Lawsuits
The White Law Group is investigating the liability that brokerage firms may have for recommending the following risky bonds:
- Illinois Finance Authority Multifamily Housing Revenue Bonds (Better Housing Foundation Shoreline Portfolio Project), Series 2016A (45202LBF0, 45202LBJ2, 45202LBK9)
- Illinois Finance Authority Multifamily Housing Revenue Bonds (Better Housing Foundation Shoreline Portfolio Project), Taxable Series 2016B (45202LBG8)
- Illinois Finance Authority Multifamily Housing Revenue Bonds (Better Housing Foundation Shoreline Portfolio Project), Subordinate Series 2016C (45202LBH6)
According to the offering statements, buying the bonds “involves a significant degree of risk” due to factors such as the limited sources for repayment and real estate and operating risks and that no assurances could be made that project revenues would cover bond repayment.
Brokerage firms are required to perform adequate due diligence on any investment they recommend and to adequately disclose the risks of any investment. Additionally, brokerage firms are required to ensure that all investment recommendations made are suitable in light of the client’s age, investment experience, investment objectives, net worth, and income.
If you are concerned about your bond investments in the Shoreline Portfolio Project and would like to speak to a securities attorney about your potential to recover your investment losses, please call our offices at (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 White Law Group, please visit our website at www.whitesecuritieslaw.com.