American Finance Trust (AFIN) Liquidity Plan

American Finance Trust – AFIN Stock Lawsuit Updated July 1, 2019

Did you lose money investing in American Finance Trust at the recommendation of your financial advisor? If so, the securities attorneys at The White Law Group may be able to help you recover your losses through FINRA arbitration.

American Finance Trust (AFIN) is a public, non-listed real estate investment trust formerly known American Realty Capital Trust V.  As of December 31, 2017 AFIN real estate assets, at cost, comprised $3.5 billion.

On July 9, 2018, American Finance Trust (AFIN) announced that it had conducted a 2-1 reverse stock split and changed its common stock to Class A common stock in furtherance of its phased liquidity plan, which is intended to reduce prospective selling pressure immediately following the listing of AFIN’s Class A common stock on the NASDAQ.

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According to SEC filings, the phased liquidity plan additionally includes the reclassification of one-third of the shares of Class A common stock into Class B-1 common stock and Class B-2 common stock, respectively. Shareholders will receive 0.5 shares each of Class B-1, and Class B-2 shares, respectively, as a stock distribution on each share of Class A stock.

AFIN also reported that the Board approved $200 million to be used for purchases of AFIN stock, as the Board deems prudent, following the listing of shares.

As previously reported, AFIN announced that the annual distribution per share will be decreased approximately 15.4% from $1.30 to $1.10 starting July 1, 2018. Additionally, the distribution reinvestment plan (DRIP) was suspended on June 30, 2018, beginning with the July 2, 2018, distribution, which was paid in cash. AFIN anticipates that the DRIP will resume at some future date. The share repurchase plan was also terminated effective June 30, 2018. 

Update on July 1, 2019

According to a lawsuit filed last fall, shareholders of American Finance Trust are suing over an IPO that allegedly wiped $1 billion off the company’s market value.

On July 19, 2018, AFIN opened on the Nasdaq at $13.15 per share and closed at $15 per share. On Oct. 14,2018,  the REIT’s stock price closed at $14 per share, 40 percent lower than its net asset value of $23.56 per share.

The plaintiffs, reportedly  gained shares in American Finance Trust after it merged with another AR Global REIT, American Realty Capital – Retail Centers of America.

According to the lawsuit, the company did not outline the possible negative impacts of the merger on the financial performance of the REIT in its registration statement.

Investigating Potential Lawsuits

The White Law Group continues to investigate potential claims involving broker dealers who may have unsuitably recommended American Finance Trust to investors. The firm continues to receive calls from investors who have lost money in high risk non-traded REITs such as AFIN.

If you suffered losses investing in American Finance Trust, the securities attorneys at The White Law Group may be able to help you. To speak to a securities attorney about the potential to recover your investment losses, please call the offices of The White Law Group at 1-888-637-5510 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 Vero Beach, Florida.

For more information on The White Law Group, visit www.whitesecuritieslaw.com.

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