NB Flats DST Lawsuit – Investor Complaints & Bankruptcy Investigation
Are you concerned about your investment in NB Flats DST? If so, the securities attorneys at The White Law Group may be able to help you recover your losses by filing a FINRA arbitration claim against the brokerage firm that recommended the investment.
What is NB Flats DST?
NB Flats DST is a Delaware Statutory Trust sponsored by Nelson Brothers (also known as NB Private Capital, Versity Investments, and later Crew). The 1031 exchange investment offering was launched in 2017, according to SEC filings, with a reported offering amount of approximately $3.5 million.
The property was marketed as a student housing investment opportunity, structured to qualify for 1031 exchange tax deferral. However, like many DSTs, it carried significant risks that may not have been fully disclosed to retail investors.
NB Flats DST Bankruptcy – Chapter 11 Converted to Chapter 7
On April 16, 2024, NB Flats DST reportedly filed for Chapter 11 bankruptcy protection in an effort to restructure its debts. However, the case was later converted to a Chapter 7 liquidation on February 19, 2025, according to public court filings.
This means the trust’s assets are being liquidated to pay creditors, and investors are unlikely to recover the full value of their original investment. The bankruptcy has raised serious questions about mismanagement, due diligence failures, and the suitability of DSTs for many retail investors.
Risks of DST Investments
Delaware Statutory Trusts (DSTs) are often marketed as passive, tax-deferred real estate investments for accredited investors, but they come with substantial risks:
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Illiquidity: There is no active secondary market for most DSTs.
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Lack of control: Investors have no voting rights or decision-making power.
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No ability to raise capital: If unexpected expenses arise, investors may be left without recourse.
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High fees and commissions: Sponsors and brokers typically earn large commissions, which may incentivize unsuitable recommendations.
Investigating Potential NB Flats DST Lawsuits
The White Law Group is investigating potential lawsuits involving NB Flats DST, including claims that brokerage firms may have:
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Recommended unsuitable high-risk investments
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Failed to conduct adequate due diligence on the offering
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Failed to fully disclose the risks of DST investments
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Misrepresented the financial stability or viability of the property
Brokers have a duty to recommend investments that are suitable based on each investor’s risk tolerance, financial situation, and investment objectives. When they breach this duty, they can be held liable for investment losses in a FINRA arbitration claim.
Recovering Investment Losses
If your financial advisor recommended NB Flats DST without fully disclosing the risks, or if the investment was unsuitable for your portfolio, you may have grounds to file a claim for recovery.
FINRA Dispute Resolution provides a forum for investors to seek compensation for losses caused by broker misconduct or negligence.
FINRA Arbitration vs. Class Action
Many investors wonder if a class action lawsuit is better than pursuing an individual FINRA arbitration claim. Generally:
- If your losses exceed $100,000, individual arbitration may be more appropriate.
- Class actions are typically better suited for smaller, uniform claims.
Free Consultation – Nationwide Representation
If you have questions about a potential NB Flats DST lawsuit, please call the securities attorneys at The White Law Group at 888-637-5510 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm, with offices in Chicago, Illinois and Seattle, Washington.
For more information, visit https://whitesecuritieslaw.com.
FAQs – NB Flats DST Lawsuit & Bankruptcy
1. What happened to NB Flats DST?
The student housing investment sponsored by Nelson Brothers, filed for Chapter 11 bankruptcy in April 2024 and was later converted to Chapter 7 liquidation in February 2025. This means the property is being sold off to pay creditors, and investors may face significant losses.
2. Can I recover losses from my investment in NB Flats DST?
Possibly. If your broker recommended a DST or other investment without properly disclosing the risks, or if the investment was unsuitable based on your financial situation, you may be eligible to file a FINRA arbitration claim to recover your losses.
3. Why are DST investments like NB Flats considered high-risk?
DSTs are illiquid, offer no control to investors, and cannot raise additional capital if financial issues arise. These risks are often understated during the sales process, and brokers may promote them for the high commissions they generate—despite their unsuitability for many investors.
