First Capital Retail LLC:  Files Chapter 11

First Capital Investment Corporation BDC listed as creditor

On September 14, 2017, First Capital Retail LLC filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of California, according to Bloomberg. First Capital Retail was incorporated in 2014 and is based in Rancho Cordova, California.

First Capital Retail filed for bankruptcy protection and subsequently amended the filing to name First Capital Investment Corporation as a creditor. First Capital Investment Corporation is a publicly registered, non-traded business development company. The Company is focused on generating current income and long-term capital appreciation by investing in primarily private U.S. small and middle-market companies. FCIC provides customized financing solutions through directly originated loans, through equity investments, and by participating in syndicated transactions.

A Business Development Company (“BDC”)  invests in small and mid-sized businesses. Investors can buy shares in a BDC, and the money from their investments is used to fund the businesses. In turn, investors can profit from dividends paid on their investments, or, in some cases, the sale of their shares.

Risks of BDCs

Business Development Companies such as First Capital Investment Corporation operate much like REITs (Real Estate Investment Trusts). Non-traded BDCs have many of the same problems for investors as non-traded REITs. They are high-risk, often have high commissions, and lack liquidity.

The White Law Group has represented a number of investors over the last few years in non-traded REITs and as well as BDCs. Due to high commission structure, many times financial advisors will push these products unsuitably to maximize their own earnings. The firm is investigating the liability that brokerage firms may have for recommending high-risk BDCs, like First Capital Investment Corporation.

Brokerage firms are required to perform adequate due diligence on any investment they recommend. They must ensure that all recommendations are suitable for the investor in regards to investor’s age, investment experience, net worth, risk tolerance, investment objectives, and income.  Firms that fail to perform adequate due diligence or that make unsuitable recommendations can be held responsible for investment losses in a FINRA arbitration claim.

Did you suffer losses investing in First Capital Investment Corporation or another investment? If so, please call the securities attorneys of The White Law Group at 888.637.5510 for a free consultation.

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. The firm represents investors in FINRA arbitration claims throughout the country.

For more information on the firm, visit https://whitesecuritieslaw.com.