Financial firm Beneficient Co. Group LP urged a bankruptcy court to keep sealed details of an investor claim that it siphoned funds from its former parent company, saying that disclosing such allegations would cause further financial damage for the firm and its investors, WSJ Pro Bankruptcy reported. Beneficient received $230 million from former parent company GWG Holdings Inc. before being carved out as an independent entity in 2021, less than five months before GWG filed for chapter 11 bankruptcy protection. GWG investors have been probing how it wound up bankrupt after selling more than $1 billion in bonds as a capital-raising vehicle for Beneficient, a financial-services firm led by Dallas-based entrepreneur Brad Heppner. The official committee of bondholders in GWG’s chapter 11 case alleged in a legal motion last month that Mr. Heppner funneled funds from GWG to Beneficient through conflicted, related-party deals in return for equity of unproven value, which he has denied. From 2019 to 2021, when most of those bonds were sold, Beneficient and GWG were led by many of the same people, as the companies had largely overlapping boards of directors. Parts of the bondholder attorneys’ December filing were redacted. Bankruptcy Judge Marvin Isgur has said those redactions contained criminal and quasi-criminal allegations, and indicated that he wanted to unseal them to provide transparency for stakeholders in GWG’s chapter 11 case.
