**Update: April 2022: GWG Prepares to File for Bankruptcy

As reported by the Wall Street Journal, GWG Holdings is preparing to file for Chapter 11 bankruptcy following accounting issues, millions of dollars in missed payments to investors, and over $2 billion in liability. In an April 1, 2022, SEC filing, GWG states that it was unable to file its 2021 annual report and other financial statements because the company still hasnt found an auditor to replace its previous auditor that resigned in late 2021, Grant Thornton. The fact that GWG still hasnt found an auditor is a likely sign that the company is preparing to file for bankruptcy, according to InvestmentNews. An anonymous GWG L Bond investor interviewed by InvestmentNews estimates L Bonds to be worth just 20 or 30 cents on the dollar at this time.  

Gibbs Law Group and Silver Law Group are investigating and filing arbitration claims on behalf of GWG investors who may have improperly sold L Bonds by GWG Holdings, Inc. Contact our securities team to discuss your potential options for recovery. 

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**Update:  February 14, 2022: GWG Defaults**

On February 14, 2022, GWG Holdings officially defaulted after missing an SEC deadline to make millions of dollars worth of payments to investors (read the letter here). The company states in the letter that L Bond sales remain paused, and all interest, maturity, dividend, and redemption payments to investors are suspended. Now, investors are at risk of losing a substantial portion of their principal investments as GWG looks into restructuring options.  GWG added that this process of “identifying and evaluating restructuring alternatives” which it expects to take at least another three to four weeks or longer, and will inform investors “if and when” it is able to restart cash payments in the future.  

*Update: January 25, 2022: GWG Pauses Sale of L Bonds*

In a letter sent out to investors on January 24, 2022, GWG announced that it had paused the sale of L Bonds retroactively to January 10, 2022, and that the Board of Directors had retained the services of a restructuring advisor to identify and evaluate options for the company to meet its financial obligations. Read the letter here: (GWG suspends sale of L Bonds.) The letter added that GWG is “unable to reliably estimate when L Bond sales could return to a level that we would generally expect to assist in meeting our ongoing financial obligations.” 

GWG also admitted in the investor letter and a previous 8-K filing that it has failed to make millions of dollars’ worth of interest, maturity, dividend, and redemption payments on its L Bonds. According to the filing, GWG had a 30-day grace period to make these payments, or risk entering an event of default.  

SEC investigating GWG Holdings

On April 16, 2021, GWG Holdings was notified that it was not in compliance with Nasdaq’s listing requirements after it failed to file financial statements for the first three quarters of 2021. Nasdaq then threatened to delist the company. In its end of year report for the year ending December 31, 2020, (form 10K) GWG admitted that it was in financial trouble due to several factors, including an ongoing non-public, fact-finding SEC investigation and the pause of L Bond sales:  

“The potential NASDAQ delisting and our current inability to sell L Bonds as discussed above, in combination with significant recurring losses from operations, negative cash flows from operations, delays in executing our business plans, and any potential negative outcome from the ongoing SEC investigation discussed elsewhere in this Form 10-Q, raise substantial doubt about our ability to continue as a going concern for the next 12 months following the filing of this Form 10-Q.”  

Shortly after, on December 31, 2021, the company’s independent auditor resigned after GWG announced that it would not file its annual report on time, according to an SEC 8-K filing. As of early 2022, the company’s stock price has plunged as low as $3.19 following the news of the company’s troubling financial woes. 

GWG has history of reporting millions of dollars' worth of losses to the SEC; previously suspended L Bond sales due to late filings

In its 2020 end-of-year report (Form 10-K) GWG disclosed that it has a “history of net losses and our future earnings, if any, and cash flows may be volatile.”  For the years ended December 31, 2020, and 2019, GWGH’s net losses from operations were $208.5 million and $151.5 million respectively. 

According to a Form 8-K from August 2021, GWG announced that its board of directors determined that certain previously issued financial statements including its annual report for the year ended 2019, and the quarterly reports for the first three quarters of 2020 “should no longer be relied upon.” The filing adds that “ The Company suspended the sale of its L Bonds due to the fact that the Company did not timely file its 2020 Form 10-K.” 

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