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The company logo at Beneficient, a new financial services company in Dallas that turns assets into cash for high-net-worth individuals, institutions and private equity funds.<\/p>\n
Carly Geraci\/Staff Photographer<\/p>\n
Months after its founder was convicted for charges related to a $150 million fraud scheme<\/a> and in dire financial straits, Dallas-based\u00a0Beneficient has announced its plan for a path forward.<\/p>\n As detailed in a Wednesday news release, the alternative asset company will pursue the liquidation of founder Brad\u00a0Heppner’s equity\u00a0and elimination of the $130 million in debt remaining\u00a0on Beneficient’s\u00a0balance sheet that was a cornerstone of Heppner’s fraud scheme. Beneficient says it is seeking a consensual resolution with Heppner before he is set to be sentenced on Oct. 21 for charges carrying a maximum combined sentence of more than 60 years, but it is prepared to pursue all possible remedies and claims if an acceptable resolution cannot be reached.\u00a0<\/p>\n \u201cSince the conviction, we have focused on pursuing a resolution that fully addresses Mr. Heppner\u2019s misconduct and the harm it caused Beneficient,\u201d CEO James G. Silk said. \u201cOur objective is a complete separation through the elimination of the purported HCLP debt and all of Mr. Heppner\u2019s remaining equity, contractual and governance interests in the Company. We believe that outcome is both just and necessary to protect Beneficient from further harm. Achieving it would transform our balance sheet, unlock substantial value for our stockholders, and position the Company and its operations to realize its full potential.\u201d<\/p>\n Article continues below this ad<\/p>\n Heppner, 60, was arrested in November<\/a> and convicted in May on multiple fraud charges, a\u00a0conspiracy charge and for making false statements to auditors. The\u00a0indictment alleged Heppner used Beneficient as a middleman to funnel money from GWG Holdings, which operated in the life insurance sector,\u00a0to a shell company he controlled.\u00a0<\/p>\n Related story: Beneficient founder Brad Heppner convicted in $150 million fraud scheme<\/a><\/p>\n GWG Holdings took a stake in Beneficient in 2018, and the following year, Heppner, in his capacity as CEO, allegedly directed Beneficient to acquire the equity interests of GWG Holdings’ founding shareholders, according to the indictment. Heppner then installed himself as chairman of GWG Holdings’ board and appointed his associates as CEO and directors.<\/p>\n At the time\u00a0GWG Holdings took a stake in Beneficient, Beneficient had a $141 million debt on its books to Highland Consolidated Limited Partnerships, or HCLP, purportedly a third-party lender that had helped get Beneficient up and running. However, it was actually a shell company controlled by Heppner, who fabricated the debt.\u00a0<\/p>\n Then, Heppner allegedly convinced the board of GWG Holdings to transfer $300 million to Beneficient, ostensibly to pay down its debt, and Beneficient ultimately transferred about $150 million to HCLP. That money flowed through entities Heppner controlled,\u00a0covered up by fabricated documents and board meeting minutes, while he spent millions on renovating his Highland Park mansion, private air travel and jewelry.<\/p>\n Article continues below this ad<\/p>\n GWG Holdings filed\u00a0for Chapter 11 bankruptcy in 2022<\/a> following a U.S. Securities and Exchange Commission investigation into its accounting practices, leaving thousands of investors holding the bag for more than $1 billion GWG Holdings owed them.<\/p>\n Brad Heppner, CEO of The Beneficient Company Group, poses for a portrait at Beneficient in Dallas on Aug. 24, 2018. Beneficient is a new financial services company in Dallas that makes turning assets into cash easier for high-net-worth individuals, institutions and private equity funds.\u00a0<\/p>\n Carly Geraci\/The Dallas Morning News<\/p>\n Heppner founded Beneficient in 2003 to help the ultrawealthy turn nonliquid assets into cash and became a prominent local businessman. In 2020, Heppner and his wife, Aurelia, donated $11.5 million to Southern Methodist University<\/a>, where Heppner is an alumnus.\u00a0<\/p>\n<\/p>\n
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