TNP Strategic Retail Trust Inc. has cancelled its dividend for the first quarter of 2013 and announced that it may not be able to resume dividend payments for the remainder of 2013.
Documents filed with the securities regulators and reviewed by securities attorneys Jason Kane and Joe Peiffer suggest that TNP Strategic Retail Trust’s cash problems could be aggravated by the prospect of litigation with one of its lenders. To make matters worse for its investors, attorneys Rosca and Peiffer determined that TNP Strategic Retail Trust’s ability to pay further distributions in the future may be significantly restricted as a result of TNP Strategic Retail Trust’s default on one of its loans and the negotiations to restructure the defaulted loan.
TNP Strategic Retail Trust indicated in a filing with the Securities and Exchange Commission that it is negotiating a forbearance agreement in connection with the defaulted loan. Assuming an agreement is reached, TNP stated it would likely impose “more severe restrictions” on its ability to pay distributions to its shareholders, until it repays the amount owed to that lender.
“Many retired TNP Strategic Retail Trust investors are counting on quarterly distributions on their investments to make ends meet,” said securities lawyer Jason Kane. “Having their life savings stuck in an illiquid investment, with uncertain prospects of receiving distributions – or their principal – any time soon, is not what most senior investors have in mind when they invest in a product recommended by their stockbroker,” said Rosca.
“Securities broker-dealer firms and their stockbrokers have a duty to evaluate each of their client’s risk profile and only recommend investments that are suitable for that client,” said securities lawyer Joe Peiffer.
Other TNP-sponsored REIT investments, such as TNP 12% Notes Program and TNP 2008 Participating Notes, are also experiencing cash flow problems, according to media reports and regulatory filings.
Attorneys Rosca and Peiffer are investigating the sales practices of the securities broker-dealer firms that sold the TNP investments to their customers, to determine whether the risks surrounding the TNP Strategic Retail Trust investment were fully disclosed to investors. They are preparing to seek compensation from securities broker-dealer firms on behalf of those investors who were sold the TNP investments in violation of the securities rules and regulations.
TNP fund investors who did not receive scheduled distributions on their investments may contact attorneys Rosca or Peiffer toll free at (216) 589-9280 for a free evaluation of their case.