GPB Automotive Portfolio, LP’s Latest Public Filing Raises Doubts That the Business Will Survive; Investors Should Contact an Attorney to Review Legal Rights

On Friday, May 14, 2021, GPB Capital Holdings LLC (“GPB Capital”), a private equity firm based in New York, registered some units in its GPB Automotive Portfolio, LP (“GPB Automotive”) with the Securities and Exchange Commission. As part of its filing, GPB Automotive disclosed that it had substantial doubt of its ability to continue operations. Specifically, GPB Automotive made the following risk factor disclosures to investors and potential investors:

• We have determined that there is substantial doubt as to our ability to continue as a going concern, due to the expiration of the credit facility for the majority of our dealerships within 12 months, as well as certain other factors. Our inability to extend the maturity of our credit facility, or replace the credit facility, prior to its maturity in February 2022 would materially adversely affect our financial condition, results of operations, cash flows and business operations.
• We may not have adequate funds to complete future capital improvement programs or to make additional acquisitions.
• Our strategy depends upon on substantial capital and we may not have access to consistent financing sources on favorable terms.
• We and our dealerships have incurred substantial indebtedness. Our indebtedness obligations could materially adversely affect our financial health, limit our ability to finance future acquisitions and capital expenditures and prevent us from fulfilling our financial obligations. If we do not comply with the terms of our debt agreements, our lenders could seek to exercise remedies against us and access to capital may be on unfavorable terms, limited or unavailable.
• Our Limited Partners may not receive distributions and our distributions may not grow over time.
• Expenses related to GPB and Highline are significant. We need to make substantial profits to avoid depletion of our assets and provide a return to our Limited Partners.
• We have concluded that there are pervasive material weaknesses in our system of internal control over financial reporting, which if not remediated could materially and adversely affect our ability to timely and accurately report our results of operations and financial condition.

GPB Automotive’s Form 10 filing can be found on the SEC’s EDGAR website.

On February 4, 2021, the SEC charged parent company GPB Capital and three individuals with running a Ponzi-like scheme that raised over $1.7 billion from securities issued by GPB Capital in four of its funds, including GPB Automotive. The SEC’s fraud case has been put on hold pending the outcome of related criminal fraud cases against GPB founder David Gentile and two others.

Related actions have also been initiated all over the country. The New York State Attorney General filed a complaint against GPB Capital alleging that some 17,000 investors could have been defrauded.

How to Recover GBP Investment Losses

Our law firm is investigating claims on behalf of defrauded investors who were victims of the alleged GPB Ponzi-like scheme. The GPB funds were marketed to independent broker-dealers and investment advisers who would, in turn, sell the GPB funds to their retail investors.

If you invested in the GPB funds, contact New York securities arbitration attorney August Iorio of Iorio Law PLLC. August Iorio can be reached at info@iorio.law or toll-free at (646) 330-4624 for a free and confidential review of your legal rights.

About Iorio Law PLLC

Iorio Law PLLC is a securities arbitration law firm located in New York, NY. We represent investors nationwide and vigorously pursue FINRA arbitration claims on behalf of investors to recover investment losses.

We have over 15 years of experience as securities arbitration lawyers and have helped investors recover investment losses in over 800 cases. The firm will file a FINRA securities arbitration claim on your behalf on a contingency fee basis to try to recover your losses. If we do not obtain a recovery, you do not owe us a legal fee.

This blog was published by August Iorio when he was a Partner at his previous firm and has been updated to reflect Iorio Law PLLC’s new contact information. To evaluate any potential claims, contact securities arbitration lawyer August Iorio for a free consultation contact Iorio Law PLLC at info@iorio.law or (646) 330-4624.