Did your Broker Recommend an Investment in Spring Hills Holdings LLC?
Spring Hills Holdings, LLC., is a health care owner-operator offering a “senior care investment opportunity,” according to the DI Wire. The company filed a form D to raise capital from investors in 2017. The total offering amount was purportedly $25,000,000, according to SEC filings.
Spring Hills Holdings Risk Factors
According to a Spring Hills Holdings brochure, “an investment in the Company will involve significant risks due to among other things, the nature of the Company’s investments and actual and potential conflicts of interest, and there can be no assurance that the Company will realize positive returns on its investments or that there will be any return to investors of their original investment.
Investors may lose some if not all their investment in this company. The risks involved in an investment in the Class C Units in the Company include, but are not limited to, the following:
-The assets we own are limited in number and located in a limited number of states and in a specific industry and therefore an investment in the preferred equity program described herein will not be as diversified as other investments may be.
-We will have sole discretion with regards to the assets in which we choose to invest, own and operate and when we, through our subsidiaries, dispose of such assets or discontinue operation of such facilities.
-This is a “best efforts” offering, and if we are unable to raise substantial funds then we may not be able to diversify our investments.
-The preferred equity program described herein represents an indirect investment in real estate and, therefore, is subject to real estate-related risks.
-We have limited operating history.
-There are substantial conflicts of interest between us, our subsidiaries and our manager and his affiliates.
-There is no public trading market for our shares and we are not required to list or liquidate by a certain date or at all. Accordingly, our shares lack liquidity, and you may -have to hold the investment indefinitely.
-There are restrictions on your ability to have your shares redeemed under our redemption program.
-You will have limited rights to vote on matters related to our operations and the operations of our subsidiaries.
-We incur substantial debt, which will increase our risk and may reduce our distributions.
-There are risks associated with the Company’s use of leverage and its ability to finance or refinance new or existing Communities, as applicable.
– There can be no assurance that cash distributions will in fact be made or, if made, whether those distributions will be made when or in the amount anticipated.”
Is this Private Placement Investment Suitable for you?
Reg D Private Placement investments such as this one is generally speculative, high-risk investments and due to these risks are often unsuitable for many investors. Despite the risks of investing in alternative investments, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation.
Since they are generally not traded on any exchange, private placement offerings are typically illiquid investments. There are often legal or contractual restrictions on your ability to transfer your holdings, and even if sale of your holdings is permitted there may be no buyers. You may need to hold these securities for an indefinite time.
While some private placement investments may make periodic distributions, others may not make any.
Brokerage firms have a responsibility to adequately disclose all risks before selling any investment and must consider suitability factors such as age, financial needs, and risk tolerance to name a few. Firms that do not perform adequate due diligences on an investment or demonstrate a breach of fiduciary duty can be held accountable for losses incurred through FINRA arbitration.
Filing a Complaint against your Brokerage Firm
If you are concerned about an investment in Spring Hills Holdings LLC, the securities attorneys at The White Law Group may be able to help you. Please call the offices at 888-637-5510 for a free consultation with a securities attorney.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.
For more information on the firm, please visit https://whitesecuritieslaw.com.
