The Woodbridge Group of Companies LLC has filed for bankruptcy, and former CEO Robert Shapiro is under investigation for potentially orchestrating $1 billion in fraud related to real estate investments.
Need a Woodbridge Real Estate Bankruptcy Lawyer? If you were an investor in these related real estate investment companies, you are entitled to immediate relief by filing a claim in the bankruptcy proceedings. Time is limited and it is important you speak with an attorney immediately. You should contact our lawyers immediately for a free case review.
What is the problem?
The Woodbridge Group of Companies is a luxury real-estate investment firm with properties in Southern California. Many of its investors are physicians in California. Woodbridge Group allegedly told investors that 3rd party LLCs were borrowing money to buy luxury real-estate and repaying interest at a high rate, of which the investors would get a cut — but evidence suggests that many, if not all, of these LLCs were actually Woodbridge affiliates managed by Shapiro.
Woodbridge Investors Could Lose Millions
In December 2017, Robert Shapiro resigned as Chief Executive Officer (CEO) of the luxury real estate investment firm, Woodbridge Group of Companies LLC, and filed Chapter 11 bankruptcy.
The bankruptcy and resignation came amid investigations into potentially $1 billion in securities fraud. The bankruptcy means that thousands of individual investors are now at risk of losing hundreds of millions of dollars as part of the Woodbridge Chapter 11 bankruptcy.
Woodbridge Group Files for Bankruptcy
Woodbridge filed for Chapter 11 bankruptcy claiming that it “intended to restructure its approximately $750 million in debt.” Robert Shapiro, the former CEO of Woodbridge, resigned from the Woodbridge Group— but he immediately took on a consulting role with a monthly fee of $175,000 from WFS Holding Co., another entity that he controls.
SEC Investigates Securities Fraud
The U.S. Securities and Exchange Commission (SEC) has been investigating whether Robert Shapiro and the Woodbridge Group “operated a fraud on its investors” since 2016.
According to an SEC filing on October 31:
“Woodbridge has represented to investors that bona-fide third parties are borrowing money and repaying interest at a high rate, of which the investors in Woodbridge funds get a portion thereof. … However, evidence obtained in our investigation reveals that many, if not all, of these LLCs may be Woodbridge affiliates with Shapiro as their manager.”
In August 2017, the SEC subpoenaed 235 LLCs that were believed to be owned or controlled by Robert Shapiro. When the Commission did not receive an adequate response, they requested a federal order to compel compliance with the subpoenas.
The Woodbridge Group of Companies quickly filed for Chapter 11 bankruptcy. In the filing, Woodbridge cited “unforeseen costs associated with ongoing litigation and regulatory compliance.”
The bankruptcy was filed in the U.S. Bankruptcy Court, District of Delaware (Wilmington) — In RE: Woodbridge Group of Companies LLC — Case No. 17-12560.
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