MCG Hendersonville TIC LLC Investor Lawsuits
The White Law Group is investigating potential claims involving brokerage firms that recommended investments in MCG Hendersonville TIC LLC, a Delaware-based limited liability company formed in 2020. According to a Form D filed with the Securities and Exchange Commission, the company is offering up to $14.2 million in tenant-in-common (TIC) securities under Rule 506(b) of Regulation D.
The minimum investment in this offering was listed as $100,000, with sales reportedly marketed through Arete Wealth Management (CRD# 44856).
Understanding TIC and DST Private Placements
TIC and Delaware Statutory Trust (DST) offerings are often sold to investors seeking 1031 exchange opportunities for deferring capital gains taxes after the sale of real estate. While these investments may appear attractive for income and tax benefits, they often involve substantial risks, including:
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Illiquidity – There is typically no secondary market for TIC or DST securities, meaning investors may not be able to sell their interests if they need access to cash.
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High Commissions – Broker-dealers may earn commissions as high as 7–10%, creating potential conflicts of interest when recommending these products.
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Concentration Risk – Many TIC offerings are tied to a single commercial property, leaving investors vulnerable if that property underperforms or loses tenants.
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Limited Control – Investors usually have little to no say in the management decisions of the property.
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Foreclosure and Losses – Because TIC/DST offerings often use leverage, investors can face significant losses if the property’s performance fails to meet projections.
Potential Liability of Brokerage Firms
Brokerage firms that sell TIC or DST offerings are required under FINRA rules to ensure that the investments are suitable for the investor’s objectives, financial situation, and risk tolerance. If your broker recommended MCG Hendersonville TIC LLC or a similar high-risk private placement without properly disclosing these risks, you may have a claim for recovery.
FINRA Arbitration vs. Class Action
Investors considering legal action against their brokerage firm often ask whether to pursue a class action lawsuit or an individual claim.
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FINRA Arbitration: Most investor claims against brokerage firms must be resolved through FINRA’s dispute resolution forum. Arbitration is typically faster and more efficient than court litigation, and it allows investors to recover losses on an individual basis.
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Class Actions: While class actions may seem appealing, they are less common for these types of securities offerings. Even if a class is certified, investors often recover only a fraction of their losses.
For most investors, FINRA arbitration is the primary avenue of recovery.
Free Consultation
If you invested in MCG Hendersonville TIC LLC or another TIC/DST offering and are concerned about potential losses, the securities attorneys at The White Law Group may be able to help. We represent investors nationwide in claims against the brokerage firms that sold these high-risk private placements.
For a free consultation with a securities attorney, please call (888) 637-5510 or visit whitesecuritieslaw.com
Frequently Asked Questions (FAQs)
What is MCG Hendersonville TIC LLC?
MCG Hendersonville TIC LLC is a tenant-in-common (TIC) investment program formed in Delaware in 2020. According to its SEC filing, it sought to raise over $14 million through the sale of TIC securities, often marketed for use in 1031 exchanges.
Why are TIC and DST investments risky?
These investments are generally illiquid, involve high fees, and are tied to single properties that may underperform. Because of leverage and market risks, investors may face significant losses.
Who sold MCG Hendersonville TIC LLC investments?
According to SEC filings, the offering was marketed through Arete Wealth Management. Other brokerage firms may also have recommended the investment.
Can I sue the sponsor directly for my losses?
In most cases, recovery is pursued against the brokerage firm that recommended the investment, not the sponsor itself. Sponsors often have limited financial resources, whereas brokerage firms have regulatory responsibilities to ensure suitability.
What is the difference between a class action and FINRA arbitration?
Class actions typically consolidate many investors’ claims into one lawsuit, but recoveries are often small. Most investor claims are instead resolved through FINRA arbitration, which allows individuals to pursue their own losses directly against the selling brokerage firm.
How can I recover losses in a private placement investment?
If your broker recommended this investment without properly explaining the risks, you may be eligible to file a FINRA arbitration claim. The White Law Group can evaluate your situation and advise you on potential recovery options.
