UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Beneficient
(Name of Issuer)
Class A Common Stock, $0.001 par value
(Title of Class of Securities)
08178Q101
(CUSIP Number)
Elizabeth C. Freeman
c/o GWG Wind Down Trust
PO Box 61209, 700 Smith St.
Houston, TX 77208-1209
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
August 1, 2023
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rules 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. ☐
CUSIP No. 08178Q101
| 1 |
NAME OF REPORTING PERSON.
GWG Wind Down Trust |
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) ☐ (b) ☒ |
| 3 | SEC USE ONLY
|
| 4 |
SOURCE OF FUNDS (SEE INSTRUCTIONS)
OO |
| 5 |
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
☐ |
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
Texas |
|
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 |
SOLE VOTING POWER
0 |
| 8 |
SHARED VOTING POWER
189,701,487 | |
| 9 |
SOLE DISPOSITIVE POWER
0 shares | |
| 10 |
SHARED DISPOSITIVE POWER
189,701,487 |
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
189,701,487 |
| 12 |
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
☐ |
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11);
72.4%1 |
| 14 |
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
OO |
| (1) | Based on a total of 234,543,727 shares of the Issuer’s Class A common stock, $0.001 per value, outstanding as of July 10, 2023 as disclosed in the Issuer’s Annual Report on Form 10-K, filed with the SEC on July 13, 2023. |
2
CUSIP No. 08178Q101
| 1 |
NAME OF REPORTING PERSON.
Elizabeth C. Freeman, solely in her capacity as trustee of the GWG Wind Down Trust |
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) ☐ (b) ☒ |
| 3 | SEC USE ONLY
|
| 4 |
SOURCE OF FUNDS (SEE INSTRUCTIONS)
OO |
| 5 |
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
☐ |
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America |
|
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 |
SOLE VOTING POWER
0 shares |
| 8 |
SHARED VOTING POWER
189,701,487 | |
| 9 |
SOLE DISPOSITIVE POWER
0 shares | |
| 10 |
SHARED DISPOSITIVE POWER
189,701,487 |
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
189,701,487 shares |
| 12 |
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
☐ |
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11);
72.4%1 |
| 14 |
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN |
| (1) | Based on a total of 234,543,727 shares of the Issuer’s Class A common stock, $0.001 per value, outstanding as of July 10, 2023 as disclosed in the Issuer’s Annual Report on Form 10-K, filed with the SEC on July 13, 2023. |
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Item 1 .Security and Issuer
This Schedule 13D relates to the Class A Common Stock, $0.001 par value (“Common Stock”), of the Beneficient, a Nevada corporation (the “Issuer”). The address of the Issuer’s principal executive office is 325 N. Saint Paul Street, Suite 4850 Dallas, Texas 75201.
Item 2. Identity and Background
| Name | Address of Business/Principal Office | Principal Business/Occupation | Jurisdiction of Organization/Citizenship | |||
| GWG Wind Down Trust | PO Box 61209, 700 Smith St. Houston, TX 77208-1209 | Liquidating Trust | Texas | |||
| Elizabeth C. Freeman, solely in her capacity as trustee | PO Box 61209, 700 Smith St. Houston, TX 77208-1209 | Trustee of GWG Wind Down Trust | United States of America |
The agreement among GWG Wind Down Trust and Elizabeth C. Freeman, solely in her capacity as trustee (the “Reporting Persons”) relating to the joint filing of this Schedule 13D is filed as Exhibit 99.1 hereto.
None of the Reporting Persons has, during the last five years: (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors); or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Considerations
On April 20, 2022, GWG Holdings, Inc. (“GWG”) and certain of its subsidiaries (together with GWG, the “Debtors”) filed a voluntary petition for reorganization under chapter 11 of title 11 of the U.S. Bankruptcy Code in the Bankruptcy Court (the “Court”) for the Southern District of Texas. On June 20, 2023, the Court entered an order confirming the Debtors’ Further Modified Second Amended Joint Chapter 11 Plan (the “Plan”) which was to be effective as soon as all conditions precedent to the Plan were satisfied or waived as set forth therein.
On August 1, 2023 (the “Effective Date”), all conditions precedent to the occurrence of the effective date as set forth in the Plan were satisfied or waived and the Plan became effective. On the Effective Date, in accordance with the Plan, substantially all shares of the Issuer owned by the Debtors were transferred to GWG Wind Down Trust.
Item 4. Purpose of Transaction
The sole purpose of the GWG Wind Down Trust is to liquidate its assets, including the reported shares, and make distributions to former creditors and other stakeholders of the Debtors as contemplated under the Plan.
Other than as described above, the Reporting Persons do not currently have any plans or proposals that relate to, or would result in, any of the matters listed in Items 4(a)–(j) of Schedule 13D, although, depending on the factors discussed herein, the Reporting Persons may change their purpose or formulate different plans or proposals with respect thereto at any time.
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Item 5. Interest in Securities of the Issuer
(a) and (b) The responses of each of the Reporting Persons with respect to Rows 11, 12, and 13 of the cover pages of this Schedule 13D that relate to the aggregate number and percentage of Common Stock of the Issuer are incorporated herein by reference.
The responses of each of the Reporting Persons with respect to Rows 7, 8, 9, and 10 of the cover pages of this Schedule 13D that relate to the number of shares of Common Stock as to which each of the persons or entities referenced in Item 2 above has sole or shared power to vote or to direct the vote of and sole or shared power to dispose of or to direct the disposition of (including but not limited to footnotes to such information) are incorporated herein by reference.
GWG Wind Down Trust is the record holder of 189,701,487 shares of Common Stock. Ms. Freeman is the sole trustee of GWG Wind Down Trust, and as such, Ms. Freeman may be deemed to have beneficial ownership of the securities directly held by GWG Wind Down Trust. Ms. Freeman disclaims beneficial ownership of such shares.
(c) Except as set forth in this Schedule 13D pursuant to the Plan, the Reporting Persons have not effected any transactions with respect to the Class A Common Stock of the Issuer during the past 60 days.
(d) The beneficiaries of the GWG Wind Down Trust ultimately have the right to receive dividends from, or the proceeds from the sale of such securities.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer
On August 10, 2018, the Issuer and GWG entered into the Registration Rights Agreement providing GWG with certain registration rights with respect to the equity in the Issuer’s predecessor. Pursuant to this Registration Rights Agreement, GWG was entitled to certain demand registration, shelf takedown and piggyback registration rights with respect to such equity, subject to certain limitations. The predecessor’s equity converted to Common Stock of the Issuer on June 7, 2023. Pursuant to a Registration Rights Agreement Assignment and Joinder, dated as of August 1, 2023, GWG assigned all of its rights under the Registration Rights Agreement relating to the reported shares of Common Stock to GWG Wind Down Trust.
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Item 7 Materials to Be Filed as Exhibits
6
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: August 11, 2023
| GWG Wind Down Trust | /s/ Elizabeth C. Freeman |
| Elizabeth C. Freeman Trustee | |
| Elizabeth C. Freeman, solely in her capacity as Trustee and not in any individual capacity | /s/ Elizabeth C. Freeman |
| Elizabeth C. Freeman |
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Exhibit 99.2
REGISTRATION RIGHTS AGREEMENT ASSIGNMENT AND JOINDER
This Registration Rights Agreement Assignment and Joinder is made as of August 1, 2023 (the “Agreement”), by and among Beneficient, a Nevada corporation f/k/a The Beneficient Company Group, L.P., a Delaware limited partnership (“Ben”), GWG Holdings, Inc. (“GWG”), GWG Wind Down Trust, a common law trust created under the laws of the state of Texas (the “Wind Down Trust”) and Mr. Jeffrey S. Stein (“Stein”). Capitalized terms used herein by not defined shall have the meanings ascribed to them in the RRA (as defined below).
RECITALS
WHEREAS, Ben and GWG are party to that certain registration rights agreement, dated August 10, 2018 (the “RRA”);
WHEREAS, on April 20, 2023, GWG and certain of its subsidiaries (together with the Company, the “Debtors”) filed a voluntary petition for reorganization under chapter 11 of title 11 of the U.S. Bankruptcy Code in the Bankruptcy Court (the “Court”) for the Southern District of Texas;
WHEREAS, on June 20, 2023 the Court entered an order (the “Confirmation Order”) confirming the Debtors’ Further Modified Second Amended Joint Chapter 11 Plan (as subsequently further modified, the “Plan”);
WHEREAS, the Plan contemplates, among other things, (i) the creation of the Wind Down Trust to implement the Plan and that the Debtors would transfer all of the Debtors interests in Beneficient and its subsidiaries, less the shares to be transferred to Stein pursuant to the following clause (ii), to the Wind Down Trust on the effective date of the Plan (the “Effective Date”) and (ii) that on the Effective Date, Stein will be entitled to receive 50,000 shares of Class A common stock, par value $0.001 per share, of Ben owned by the Debtors;
WHEREAS, the Plan contemplates that the Wind Down Trust will assume the RRA as of the Effective Date; and
WHEREAS, Section 5.2.1 of the RRA provides that the rights of GWG under the RRA may be assigned by GWG to transferees or assignees of all or any portion of the Registrable Securities, subject to compliance with subsection 5.2.4 of the RRA and Section 5.2.4 of the RRA provides that no assignment by any party to the RRA of such party’s rights, duties and obligations thereunder shall be binding upon or obligate Ben unless and until Ben shall have received (i) written notice of such assignment as provided in Section 5.1 of the RRA and (ii) the written agreement of the assignee, in a form reasonably satisfactory to Ben, to be bound by the terms and provisions of the RRA (which may be accomplished by an addendum or certificate of joinder to the RRA).
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:
| 1. | Assignment, Joinder & Acknowledgement. Effective as of the Effective Date, (i) GWG hereby assigns (A) to the Wind Down Trust, all of GWG’s demand rights under the RRA and all rights under the RRA with respect to the Registrable Securities transferred to the Wind Down Trust; and (B) to Stein, all of GWG’s rights under the RRA (excluding, for the avoidance of doubt, any demand registration rights thereunder) solely with respect to the Registrable Securities transferred to Stein (the “Assignment”); (ii) each of (A) the Wind Down Trust and (B) Stein hereby acknowledges, agrees and confirms that, it or he shall be deemed to be a party to the RRA as if it were an original signatory thereto and expressly assumes and agrees to be bound by the terms and provisions of the RRA applicable to GWG with respect to the Registrable Securities transferred to such party; and (iii) Beneficient acknowledges and agrees that the Assignment has been completed in accordance with the terms of the RRA. |
| 2. | Counterparts. This joinder may be signed in any number of counterparts, each of which is an original and all of which taken together shall constitute one and the same instrument. The delivery of an electronic signature by means of .pdf, .tif, .gif, .jpeg or similar attachment to e-mail, as well as electronic signatures complying with the U.S. federal ESIGN Act of 2000, the Uniform Electronic Transactions Act or other applicable Law (e.g., www.docusign.com), to, or a copy/scan of a manual signature on a counterpart to, this Amendment by facsimile, email or other electronic transmission shall be treated in all manner and respects as an original contract and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person. No party hereto or to any such contract shall raise the use of electronic transmission by means of .pdf, .tif, .gif, .jpeg or similar attachment to e-mail to deliver a signature or the fact that any signature or contract was transmitted or communicated by .pdf, .tif, .gif, .jpeg or similar attachment to e-mail as a defense to the formation of a contract, and each such party forever waives any such defense. |
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date above first written and authorizes this signature page to be attached to a counterpart of the Agreement.
| BENEFICIENT | ||
| By: | /s/ David B. Rost | |
| Name: | David B. Rost | |
| Title: | General Counsel | |
| GWG HOLDINGS, INC. | ||
| By: | /s/ Jeffrey S. Stein | |
| Name: | Jeffrey S. Stein | |
| Title: | Chief Executive Officer | |
| GWG WIND DOWN TRUST | ||
| By: | /s/ Elizabeth C. Freeman | |
| Name: | Elizabeth C. Freeman | |
| Title: | Trustee | |
| JEFFREY S. STEIN | ||
| /s/ Jeffrey S. Stein | ||
[Signature Page to Registration Rights Agreement Assumption and Joinder]
Exhibit 99.4
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned agree to the joint filing on behalf of each of them of a Statement on Schedule 13D (including any and all amendments thereto) with respect to the shares of Class A Common Stock, $0.001 par value per share, of Beneficient and further agree that this Joint Filing Agreement shall be included as an exhibit to such joint filings.
The undersigned further agree that each party hereto is responsible for the timely filing of such Statement on Schedule 13D and any amendments thereto, and for the accuracy and completeness of the information concerning such party contained therein; provided, however, that no party is responsible for the accuracy or completeness of the information concerning any other party, unless such party knows or has reason to believe that such information is inaccurate.
This Joint Filing Agreement may be signed in counterparts with the same effect as if the signature on each counterpart were upon the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of August 11, 2023.
| GWG WIND DOWN TRUST | ||
| By: | /s/ Elizabeth C. Freeman | |
| Title: | Trustee | |
| ELIZABETH C. FREEMAN, solely in her capacity as Trustee and not in any individual capacity | ||
| /s/ Elizabeth C. Freeman | ||