GWG Holdings preparing for bankruptcy – WSJ

Dallas-based GWG Holdings Inc. is preparing to file for bankruptcy in the coming days, The Wall Street Journal reported April 4, citing people familiar with the matter.

Due to the delay in the filing of its 2020 annual report following accounting issues and the resignation of its former independent registered public accounting firm Grant Thornton LLP, GWG had stopped selling additional L bonds and consequently missed interest payments to L bondholders in January.

L bonds were financial instruments that were used to finance the purchase of life insurance on the secondary market. GWG reportedly sold the bonds through a network of regional broker/dealers, who pitched the products to individual investors, many of whom were elderly or retired individuals.

GWG recently said that it was unable to timely file its annual report for the year ended Dec. 31, 2021, and was yet to engage an auditor.

GWG had more than $2 billion of total liabilities as of Sept. 30, 2021, including close to $1.3 billion of L Bonds, the Journal reported, citing unaudited financial statements.