Thompson National Properties LLC has suspended TNP 12 Percent Notes Program interest payments to investors. The announcement stems from Thompson National's plan to reduce costs and increase revenue. However, investors were told that Thompson National intends to pay investors the remaining interest payments and principal on or prior to June 10, 2013, the maturity date. Despite Thompson National's intentions, the current situation does not suggest a favorable outcome for TNP 12 Percent Notes investors.
Thompson National packaged and sold interests in real estate through what is known as tenant-in-common investments or TICs. TICs are investment vehicles that allow individual investors to buy shares of real estate interests directly, rather than shares of stock, bond certificates, or other forms ownership. Properties can include a high-rise office building, a retail center, a triple-net lease from a national drugstore chain, oil or gas wells, or any other type of investment property. Investors are attracted to TICs because they can purchase an interest in expensive properties - typically $30 million or more in value.
Thompson National's TNP 12 Percent Notes Program raised $21.5 million from 418 investors in 2008 and 2009, which was ultimately used to meet the general obligations of Thompson National. Twenty-two independent broker-dealers sold interests in TNP 12 Percent Notes at a minimum investment of $50,000.00. Sales commissions to those brokers were at a hefty 7%.
In many instances, broker-dealers did not understand the structure of note programs such as TNP 12 Percent Notes. This lack of due diligence can lead to a misrepresentation of the value of the underlying property. Therefore, broker-dealers must investigate into whether property values are greater than debt owed or whether the debt service on a note is manageable. If broker-dealers do not perform their due diligence, they risk placing clients in risky and unsuitable investments, which could make them liable to investors for damages.
Have you suffered a loss in a tenant-in-common investment? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.