Securities Lawyers Blog
The securities lawyers of Gana Weinstein LLP are investigating investor losses in VII Peaks Co-Optivist Income BDC II (Peaks Co-Optivist) a business development company (BDC). According to the company’s SEC filings, Peaks Co-Optivist invests in discounted corporate debt, senior secured term loan and equity-linked debt securities of public and private companies that trade on the secondary loan market for institutional investors and provide distributions to investors. Peaks Co-Optivist seeks to actively work with the target company’s management to restructure the underlying securities and improve the liquidity position of the target company’s balance sheet. This strategy targets company management on average 24 months prior to a redemption event to create an opportunity for growth in the investments.
Because Peaks Co-Optivist in non-traded product there are no market pricing for the value of the securities. The company issued shares at a price of $10.15 per share but due to fees and commissions of $1.015 only $9.135 was used to make investments. Currently, the company claims that its shares are worth $8.75 per share. However, this is highly unlikely given that the company has financed most of its distributions through returning investor capital and currently has a distribution rate of only 2.23% annualized.