Rhino Resource Partners LP Files Chapter 11 Bankruptcy

Rhino Resource Partners LP Investment Losses

Have you suffered losses investing in Rhino Resource 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.

Rhino Resource Partners LP produces and markets coal in Central and Northern Appalachia, according to Bloomberg. The Company, based in Lexington, KY, markets a broad range of mid to high Btu, low to medium sulfur steam coal to a diverse customer base of electric utilities in the United States. 

On July 22 Rhino Resource Partners LP said it has filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Ohio.

Rhino has reportedly obtained $11.75 million of post-petition financing and the support from a stalking horse bidder to acquire the company.

According to a press release, the company plans to use the bankruptcy process to implement an orderly sale of substantially all of its assets in an effort to “maximize value for all stakeholders and allow for the prospect of continued employment and business opportunities at its operating locations.”

Risks of MLPs

Master Limited Partnerships (MLPs) 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 publicly 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 is investigating the liability that brokerage firms may have for recommending high risk MLPs, like Rhino Resource Partners LP, to its clients.

Brokerage firms are required to perform adequate due diligence on the investments to ensure a reasonable likelihood of success. They must 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.

Filing a Complaint against your Brokerage Firm

If you suffered losses investing Rhino Resource 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.