If you suffered losses in Linn Energy (LINE or LNCO) you may be entitled to recovery of those losses. Please call 1-866-817-0201 for a free consultation with a lawyer about loss recovery.
LINN Energy stated on March 16, 2016 that bankruptcy protection through the courts may be unavoidable. This will leave many investors who have invested their life savings in LINN looking to change their retirement plans and their financial outlook. For many of these investors LINN Energy was never a suitable investment, and this fact may give the individuals the right to recover their losses.
While some investors may call it “LINN” and others refer to it as “LINE,” all investors can agree that investors should not be responsible for the losses in LINN Energy to the extent that the investment was procured by fraud or negligence.
Brokerages that allow the sale of unsuitable investments are responsible for the ultimate losses sustained by their investors. Brokers and financial advisors have a duty to only sell suitable investments to investors. To be suitable, the investment must be consistent with the wants and needs of the investor. LINN Energy is, and has always been, a speculative investment. Unless you are a speculative investor and could afford to gamble on high risk investments LINN Energy was unsuitable for you.
The list of people for whom LINN would be unsuitable and entitled to reimbursement includes, but is not limited to, any one of the following: conservative to moderate investors; investors reliant upon investments for income; individuals reliant upon their savings; unsophisticated investors; individuals not understanding the risks of limited partnerships; individuals who could not afford to risk the amounts invested in LINN: and individuals who would have difficulty re-earning the funds invested in LINN if the investment were completely lost.
The recommendation to invest in LINN can be the result of either negligence or fraud. Speculative investments often pay a higher commission and give brokers incentive to recommend investments that are not in the best interest of their investors. Irrespective, the broker’s or financial advisor’s employer is responsible for losses as the result of unsuitable recommendations.
The risk surrounding LINN are many and not just from the falling oil market. The potential tax consequences for its investors if LINN were to restructure some of its debt will also impact the value of the investment.
When debt is restructured, debt that is forgiven is, for tax purpose, treated as income. Since LINN is an LLC, the tax liability belongs to the investors holding Linn shares. This will further increase the losses of those holding LINN shares if they must pay tax on the income of LINN.
LLCs are popular because income is only taxed once, unlike regular corporations where the income of the corporation is taxed and the resulting dividends are also taxed. While the single taxation is popular because it means less taxation of income when things are good, the downside is that investors are responsible for the tax the LLC cannot pay when things are bad. That can accelerate the decline of an LLC when industry challenges, such as a decrease in the price of oil, occur.
This is all in addition to the likely losses that shareholders would feel from that restructuring and oil prices that may not rise above $40 per barrel in the near future.
Please call for more information. The Law Offices of Jeffrey Pederson has represented investors with suitability claims in FINRA arbitrations across the country. Most representations done on a contingency basis.
For a detailed description on the rise and fall of Linn: http://www.oilandgas360.com/rise-fall-linn-energy/