Weekly Update | October 14, 2026

By August M. Iorio | Iorio Law PLLC

This week’s Iorio Law Distressed Securities Monitor highlights an important distinction for investors in alternative investments: restricted liquidity is not necessarily the same thing as financial impairment—but sometimes the two occur together.

Our latest research identified a significant existing impairment involving Ashford Hospitality Trust’s non-traded Series J, K, L, and M preferred stock. Ashford suspended shareholder redemptions in December 2025 and preferred dividends in January 2026. By June 30, 2026, approximately $9.2 million of dividends on the four non-traded preferred series had accumulated but remained unpaid. Ashford has also reported substantial doubt about its ability to continue as a going concern.

At VineBrook Homes Trust, meanwhile, the company has now reported final results from its October tender offer. Shareholders attempted to tender more than three times the number of shares VineBrook agreed to purchase, even though the tender price was approximately 37% below the company’s June stated net asset value.

The private-credit market presents a more nuanced picture. Several major non-traded private-credit funds continue to receive withdrawal requests substantially exceeding their quarterly repurchase limits. But high redemption demand alone does not establish that those funds are insolvent or that their underlying loan portfolios have suffered equivalent losses.

Finally, the Easterly ROCMuni High Income Municipal Bond Fund provides a useful contrast. The fund suffered losses of approximately 68% during 2025 and is now being liquidated. Its experience demonstrates what can happen when liquidity pressure coincides with severe deterioration in the underlying investment portfolio.

This Monitor examines what those developments mean—and what investors should watch next.

This Week’s Distressed Securities Monitor

Ashford Hospitality Trust Preferred Stock: Dividends and Redemptions Are Both Suspended

One of the most significant securities identified in our latest research is Ashford Hospitality Trust’s non-traded preferred-stock program.

The securities include:

• Series J Redeemable Preferred Stock;
• Series K Redeemable Preferred Stock;
• Series L Redeemable Preferred Stock; and
• Series M Redeemable Preferred Stock.

These securities are separate from Ashford Hospitality Trust’s publicly traded preferred shares.

Ashford marketed the non-traded preferred stock primarily as income-producing preferred securities with a stated value of $25 per share.

The current situation is materially different from a private-credit fund merely limiting quarterly redemptions.

Ashford Suspended All Redemptions in December 2025

On December 9, 2025, Ashford’s board suspended all redemptions of its Series J, K, L, and M preferred stock.

Ashford also terminated the primary offering of its Series L and M preferred stock.

Its SEC filing warned investors that because there is no public trading market for the preferred shares, issuer redemptions were likely to be the principal means of obtaining liquidity. With those redemptions suspended, Ashford warned that shareholders should not expect to have their shares redeemed for an indefinite period, if at all.

Source: SEC filing regarding preferred-stock redemption suspension

That is a significant liquidity impairment.

Unlike a quarterly repurchase program that was always limited to 5% of outstanding shares, these preferred securities generally provided holders with contractual redemption rights, subject to applicable terms and redemption fees. Those rights are presently unavailable because Ashford suspended redemptions.

Ashford Then Suspended Preferred Dividends

The situation deteriorated further in January.

On January 13, 2026, Ashford announced that it had suspended preferred dividends, including dividends that had already been declared for shareholders of record as of December 31, 2025 and were scheduled to be paid January 15.

Source: Ashford preferred-dividend suspension announcement

Ashford stated that it took the action to preserve liquidity while evaluating strategic alternatives.

The company has said unpaid cumulative dividends will continue to accrue under the governing terms of the preferred securities.

By June 30, 2026, Ashford reported accumulated but unpaid dividends of approximately:

• $7.685 million for Series J;
• $762,000 for Series K;
• $223,000 for Series L; and
• $530,000 for Series M.

Together, that is approximately $9.2 million of accumulated unpaid dividends on the four non-traded preferred series.

Source: Ashford June 30, 2026 Form 10-Q

That is an actual payment impairment—not merely investors asking to withdraw more money than a fund’s repurchase program permits.

More Than $226 Million of Non-Traded Preferred Redemption Value Was Reported

Ashford’s June financial statements reported redemption values of approximately:

• $187.5 million for Series J;
• $19.0 million for Series K;
• $5.7 million for Series L; and
• $14.1 million for Series M.

That represents more than $226 million of reported redemption value across the four non-traded preferred series.

The amount should not be characterized as an investor loss. Ashford has not entered bankruptcy, and the ultimate value investors will receive for their preferred shares remains unknown.

Indeed, in March 2026, valuation firm Robert A. Stanger & Co. provided an estimated liquidation value of $25 per share as of December 31, 2025, equal to the preferred stock’s liquidation preference. Ashford cautioned, however, that the estimate was unaudited, was not a determination of fair market value, did not represent the price at which the shares could actually trade, and did not reflect events occurring after December 31.

Source: Ashford estimated liquidation value disclosure

The important verified facts today are more limited: shareholders cannot redeem their shares through Ashford, cash dividends have been suspended, and unpaid cumulative dividends continue to accumulate.

Ashford Has Also Issued a Going-Concern Warning

Ashford’s broader financial condition increases the importance of those developments.

As of June 30, the company reported $75 million of cash and cash equivalents and approximately $945.2 million of nonrecourse loans maturing within the following year.

Ashford stated that it may not have sufficient cash to support daily operations over that period because of debt-service requirements, debt maturities, and other potential obligations. Management concluded that there was substantial doubt about the company’s ability to continue as a going concern.

Ashford also reported that 30 hotels were subject to lender cash traps at June 30, meaning certain property cash flows were being swept into lender-controlled accounts.

Source: Ashford June 30, 2026 Form 10-Q

A going-concern warning does not mean Ashford will file bankruptcy or that preferred shareholders will lose their principal. It does mean the company itself has identified substantial uncertainty about its financial condition.

Who Sold Ashford’s Non-Traded Preferred Stock?

This question is particularly important for individual investors.

Ashford Securities LLC served as dealer manager for the non-traded preferred offerings.

For the Series J and K offering, Ashford Securities reported in December 2024 that it had raised more than $180 million through a network of 52 broker-dealers and registered investment advisers since the offering launched in May 2022.

Source: Ashford Securities distribution disclosure

SEC-filed agreements for the later Series L and M offerings also show that Ashford Securities used participating broker-dealers to sell shares. The agreements contemplated selling commissions based on the amount of preferred stock sold by each participating firm.

Source: Series L/M participating broker-dealer agreement

The identities and sales volumes of the participating brokerage firms are now an important subject of investigation.

Iorio Law is investigating which broker-dealers and financial professionals recommended Ashford Hospitality Trust’s Series J, K, L, and M preferred stock to individual investors, and what investors were told about liquidity, redemption rights, the issuer’s leverage, and the risks to the preferred distributions.

Inclusion of Ashford or any brokerage firm in this investigation does not constitute a finding that anyone violated the securities laws or other legal obligations.

VineBrook Homes Trust: Final Tender Results Confirm Significant Unmet Demand for Liquidity

VineBrook Homes Trust has now announced the final results of the discounted tender offer discussed in our recent VineBrook investigation.

The tender expired on October 5.

According to VineBrook’s final SEC filing:

• shareholders tendered approximately 2,753,350 shares;
• VineBrook purchased 909,090 shares;
• the company paid $33 per share;
• approximately $30 million of shares were purchased; and
• the final proration factor was 33.02%.

Source: VineBrook final tender results

In other words, VineBrook purchased only about one-third of the shares participating shareholders attempted to sell.

Roughly two-thirds of the tendered shares remained invested.

Shareholders Sought Liquidity at a 37.4% Discount to Stated NAV

The tender price is also noteworthy.

VineBrook reported a June 30 stated NAV of $52.68 per share. The $33 tender price was approximately 37.4% below that figure.

Despite that discount, shareholders sought to tender more than three times the shares VineBrook offered to purchase.

That does not establish that VineBrook shares are worth $33 or that every investor has suffered a 37.4% loss. A limited issuer tender is not necessarily equivalent to fair market value, and individual investors have different purchase prices and distribution histories.

But the tender provides an important liquidity signal: a substantial number of shareholders were willing to seek an exit at a material discount to VineBrook’s stated valuation, and most of the shares they sought to sell remained unredeemed.

That evidence is particularly relevant because ordinary VineBrook share repurchases have generally been suspended since December 2022.

Iorio Law’s separate VineBrook Homes Trust investigation discusses the REIT’s liquidity history and the SEC filings establishing that Raymond James & Associates acted as a placement agent under selling agreements. Read the VineBrook Homes Trust investigation

We will continue monitoring what happens to VineBrook’s stated NAV, future liquidity initiatives, financing obligations, and the brokerage firms that sold its shares.

Private Credit: Redemption Pressure Is Important—but It Is Not Automatically Investment Failure

One of the most important issues we are tracking involves large non-traded private-credit funds.

Several have experienced quarterly repurchase requests significantly above the amount they ordinarily offer to repurchase.

The numbers can sound alarming:

BCRED reported approximately $4.3 billion of Q3 requests, representing roughly 10% of shares, and will repurchase 5%. North Haven reported requests equal to approximately 11.4% of units and expects to satisfy about 43.8% of each investor’s request. HPS reported requests of approximately 11.5%, down from 13.3% in Q2. OCIC reported requests of approximately 16.8%, down from 21.9% in Q1.

Source: BCRED Q3 tender materials

OTIC remains the outlier. Its latest shareholder update reports tender demand near 39% of outstanding shares, following similarly elevated demand during the first two quarters of 2026.

Source: OTIC shareholder update

Those figures deserve scrutiny.

But they should not be interpreted as meaning investors have lost 50%, 70%, or 90% of their principal simply because only part of a redemption request was honored.

What a Repurchase Limit Actually Means

These funds invest primarily in private loans and other assets that generally cannot be liquidated instantly.

Their structures therefore offer limited periodic liquidity rather than unlimited redemption rights.

If a fund offers to repurchase 5% of outstanding shares in a quarter and shareholders attempt to redeem 15%, requests will generally be prorated.

That is a liquidity problem for an investor who needs access to capital.

It is not automatically evidence that the fund cannot meet its debts or that its portfolio has lost a corresponding percentage of its value.

What We Look for Before Calling a Security Financially Impaired

The Distressed Securities Monitor therefore looks beyond tender percentages.

Among the additional indicators we monitor are:

• sustained or accelerating declines in NAV;
• realized credit losses;
• material unrealized portfolio markdowns;
• rising non-accrual loans;
• missed borrower payments;
• distribution reductions or suspensions;
• increasing leverage;
• emergency or rescue financing;
• covenant defaults;
• inability to refinance debt; and
• signs that available liquidity may be insufficient to meet operating or financing obligations.

Those factors help distinguish investor demand for liquidity from deterioration in the investment itself.

Current Private-Credit Data Provide Important Counterweights

BCRED, for example, reported more than $17 billion of available liquidity, consisting of cash and undrawn borrowing capacity, when it disclosed its Q3 tender demand. Blackstone also reported leverage of approximately 0.8 times debt to equity.

Source: BCRED shareholder update

HPS reported that Class I investors had earned a 9.9% annualized total net return since inception through July 31, 2026, even as redemption requests remained above the quarterly limit.

Source: HLEND Q3 tender shareholder letter

OCIC reported that Q3 tender demand had declined for a third consecutive quarter—from 21.9% in Q1 to 18.8% in Q2 and 16.8% in Q3.

Source: OCIC shareholder update

OTIC reported only approximately 0.3% of its portfolio at fair value on non-accrual status as of June 30, despite extremely high shareholder tender demand. Blue Owl attributed much of the investor concern to worries surrounding technology and artificial intelligence rather than broad borrower defaults.

Source: OTIC portfolio update

Those facts do not eliminate the liquidity concerns.

They do explain why Iorio Law does not presently characterize those funds as having suffered losses equal to their unfulfilled redemption requests.

Why Private-Credit Liquidity Still Matters to Brokerage Customers

Even when the investment itself remains financially sound, restricted liquidity can still matter greatly to an individual investor.

A financial advisor may have recommended a private-credit fund to a retiree who expected periodic access to principal, to an investor funding foreseeable expenses, or as an alternative to more liquid fixed-income investments.

Whether that recommendation was appropriate depends on the investor’s circumstances and what was disclosed at the time—not simply on whether the fund later performed positively.

Several of the private-credit products we are monitoring also have significant wealth-management distribution.

SEC materials establish investor or adviser channels involving firms such as Morgan Stanley, Merrill Lynch, Raymond James, LPL Financial, Edward Jones, UBS, and others, depending on the particular fund.

Our investigation therefore focuses not merely on whether a quarterly tender was prorated, but also on how the investment’s liquidity limitations were explained and whether the recommendation fit the customer’s actual liquidity needs and investment profile.

A later liquidity restriction alone does not establish that a broker or advisor made an improper recommendation.

Easterly ROCMuni: A Very Different Type of Impairment

The Easterly ROCMuni High Income Municipal Bond Fund illustrates why distinguishing liquidity pressure from actual investment deterioration matters.

Unlike the large private-credit funds discussed above, Easterly ROCMuni suffered catastrophic investment losses.

For the year ended December 31, 2025, the Fund reported returns before taxes of:

• negative 68.47% for Class A shares (RMJAX);
• negative 67.82% for Investor Class shares (RMHVX); and
• negative 67.70% for Class I shares (RMHIX).

By comparison, the Bloomberg Municipal Bond Index returned a positive 4.25% during the same year.

Source: Easterly ROCMuni 2025 performance filing

The Fund’s own shareholder reporting attributed its deterioration in part to high redemptions and liquidity-driven dispersion.

Source: Easterly Funds shareholder report

The result was not merely a temporary redemption gate.

The Fund’s board approved a Plan of Liquidation and Dissolution, and the fund is now closed to new investors and winding up its affairs.

Source: Easterly ROCMuni liquidation supplement

The Liquidation Remains Complicated by Illiquid Assets and Litigation

The March 2026 liquidation supplement states that Easterly was seeking to convert remaining assets into cash or cash equivalents and distribute available proceeds to shareholders.

But the Fund still held illiquid investments, and Easterly stated that it could not predict how long disposition of those assets would take.

The Fund was also facing contingent liabilities associated with pending litigation. As a result, Easterly said it could not predict when the Fund would be able to begin or complete liquidating distributions to shareholders.

Source: Easterly ROCMuni liquidation supplement

This is a fundamentally different situation from a private-credit fund that continues operating with a relatively stable NAV while honoring a contractual 5% quarterly repurchase program.

Easterly ROCMuni involves substantial realized investment deterioration and an actual liquidation process.

Brokerage Distribution Remains Part of the Easterly Investigation

Easterly Securities LLC is the Fund’s distributor. Its SEC prospectus also states that the distributor and adviser could compensate financial intermediaries that sold shares or provided shareholder services. For fiscal 2025, the Fund reported Rule 12b-1 payments to dealers for both Class A and Investor Class shares.

Source: Easterly ROCMuni prospectus

Iorio Law began investigating recommendations of Easterly ROCMuni in 2025, including recommendations involving Osaic and Janney Montgomery Scott.

Our earlier report discusses the investment’s collapse and the issues we are investigating concerning brokerage recommendations: Lost Money in the Easterly ROCMuni Fund? Iorio Law Investigates Osaic and Janney Montgomery Scott

Those investigations concern allegations and factual questions about individual recommendations. Inclusion of a brokerage firm in an investigation does not constitute a finding of misconduct or liability.

The Key Distinction for Investors: Illiquidity, Impairment, and Failure Are Not the Same Thing

The developments covered this week fall at different points on the distress spectrum.

Ashford Hospitality Trust’s non-traded preferred stock currently involves suspended redemptions and suspended cash dividends, accumulated unpaid preferred dividends, and a going-concern warning.

VineBrook Homes Trust has not entered bankruptcy and continues operating, but investors demonstrated substantial demand for liquidity through a tender priced significantly below stated NAV—and only approximately one-third of tendered shares were purchased.

Private-credit funds such as BCRED, North Haven, HPS, OCIC, and OTIC are experiencing significant redemption pressure, but current evidence does not support treating an unfulfilled tender request as an equivalent investment loss.

Easterly ROCMuni experienced substantial underlying investment losses and is now liquidating.

Those distinctions matter both financially and legally.

An investment does not need to become worthless before an investor experiences meaningful harm. Loss of income, inability to access principal, substantial valuation reductions, or forced acceptance of discounted liquidity can all be important.

But the facts should be described accurately.

The purpose of the Iorio Law Distressed Securities Monitor is to identify these developments as they emerge—without assuming that every liquidity event will become a failure or that every investment loss resulted from brokerage misconduct.

What Iorio Law Is Monitoring Next

Following this week’s research, several questions warrant particular attention:

• Ashford Hospitality Trust: Which 52 broker-dealers and RIAs participated in the Series J and K preferred-stock distribution? Which firms sold the later Series L and M offerings? How much did each firm sell? When might preferred dividends or redemptions resume, and how will Ashford address approximately $945 million of near-term property debt?
• VineBrook Homes Trust: What happens to the roughly two-thirds of tendered shares that were not purchased? Will VineBrook provide additional liquidity? How will future stated NAVs compare with the $33 tender price?
• Private credit: Do repurchase requests continue moderating, or do investors repeatedly re-tender? More importantly, do NAVs, non-accruals, realized losses, leverage, or distributions begin showing material deterioration alongside the liquidity pressure?
• Easterly ROCMuni: What recoveries will ultimately be available as remaining illiquid assets are sold and contingent liabilities are addressed?

These are the kinds of developments the Distressed Securities Monitor will continue tracking each week.

About the Iorio Law Distressed Securities Monitor

The Iorio Law Distressed Securities Monitor tracks failed, impaired, illiquid, defaulted, and financially stressed investments sold to individual investors through brokerage firms and financial professionals.

Our research focuses on the investment itself and the distribution network through which it reached investors.

The Monitor does not assume that a broker-dealer or financial professional is legally responsible simply because an investment later declined, restricted redemptions, or failed. Any potential claim depends on the facts surrounding the recommendation, the investor’s circumstances, the disclosures made, the applicable legal and regulatory standards, and other evidence.

Iorio Law PLLC represents investors nationwide in disputes involving brokerage firms and financial professionals.

Investors who purchased Ashford Hospitality Trust preferred stock, VineBrook Homes Trust, Easterly ROCMuni, private-credit funds, or other impaired alternative investments through a financial advisor may contact Iorio Law PLLC at (646) 330-4624 for a free consultation.