Memorial Production Partners LP to File Bankruptcy

Memorial Production Partners Investment Losses

Are you concerned about losses investing in Memorial Production Partners LP?   If so, the securities attorneys of The White Law Group may be able to help you recover your losses in a FINRA arbitration claim against the brokerage firm that recommended the investment.

Memorial Production Partners LP was formed to own and acquire oil and natural gas properties in North America. The Company’s properties are located in South and East Texas and consist of mature, legacy onshore oil and natural gas reservoirs.  The company is based in Houston, Texas.

Memorial plans to file for Chapter 11 bankruptcy protection by Jan. 16 after reaching an agreement with its creditors on a restructuring that would see bondholders own 98 percent of common equity interest in the reorganized company. Memorial skipped a bond coupon payment in November and the bankruptcy filing will provide its partners with recovery in the form of 2 percent of the reorganized company’s equity and five-year warrants to acquire an additional 8 percent, according to its statement. It also monetized hedges on its oil and gas production to repay $190 million on a revolving credit facility.

Problem with Master Limited Partnerships

Master Limited Partnerships (MLPs), like Memorial Production Partners LP are a type of limited partnership that is publicly traded. MLP’s receive the same tax benefits of a limited partnership combined with the liquidity of a publically traded security. In order to be classified as an MLP the partnership must receive 90% of its cash flow from a “qualifying source” – such as real estate, natural resources or commodities.

MLPs have increasingly been used to invest in the energy sector and are often sold to investors seeking income.  However, MLP’s are extremely complex and risky, making them only suitable for wealthy, sophisticated retail investors or institutional investors.  They are also a dream product for Wall Street because of the fees they generate, which may cause unscrupulous financial advisors looking to maximize their own commissions to recommend them improperly..

The White Law Group continues to investigate the liability that brokerage firms may have for recommending high risk MLPs, like Memorial Production Partners LP, to their clients.

Brokerage firms that sell oil and gas MLPs are required to perform adequate due diligence on the investments to ensure a reasonable likelihood of success, and to evaluate whether the investments are suitable in light of the client’s age, net worth, investment experience, and investment objectives. Firms that fail to perform adequate due diligence, or that make unsuitable recommendations, can be held responsible for losses in a FINRA arbitration claim.

For more on the investigation see Recovery of Memorial Production Partners LP Losses.

Recovery of Investment Losses

If you suffered losses investing Memorial Production Partners LP or another MLP and would like to discuss your litigation options, please call The White Law Group at 888-637-5510 for a free consultation.

The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.  The firm represents investors throughout the country in FINRA arbitration claims against their brokerage firm.

For more information on The White Law Group, visit www.whitesecuritieslaw.com.