SETTLEMENTS
On June 13, 2025, the Bankruptcy Court approved the Motions to Settle with the D&O Defendants, Sabes Defendants, Mayer Brown, and Whitley Penn. On January 13, 2026, the United States District Court for the Northern District of Texas approved the D&O Settlement. The D&O Settlement Effective Date occurred on February 13, 2026.
On June 9, 2026, the Bankruptcy Court approved the Motions to Settle with Richards, Layton & Finger, Paul Capital Advisors, and Baker Tilly.
Please click on links below to the Orders for more details.
Approved Settlements
Director & Officer (“D&O”) Adversary Proceeding
In April 2024, the Litigation Trustee filed a lawsuit against certain former officers and directors of GWG Holdings, Inc. (“GWG”), including Brad Heppner, a number of trusts and entities related to Mr. Heppner, Beneficient (formerly, The Beneficient Company Group, L.P.), and several entities and trusts affiliated with Beneficient (the “D&O Adversary Proceeding”).
The settlement resolves the Litigation Trustee’s claims against all insured defendants in the D&O Adversary Proceeding, including Mr. Heppner, that arose on or before December 16, 2024. The settlement also resolves claims brought in a parallel putative securities class action (the “Class Action”) pending in the U.S. District Court for the Northern District of Texas (“District Court”).
On September 24, 2025, the District Court held a hearing on Lead Plaintiff’s Unopposed Motion for Preliminary Approval of Settlement and Approval of Settlement Notice. The following day, the Court entered an order preliminarily approving the Settlement. On January 13, 2026, the District Court approved the D&O Settlement. The D&O Settlement Effective Date occurred on February 13, 2026.
If you would like more information regarding the District Court’s order, a link to the order is provided here.
The settlement does not release the Litigation Trust’s claims against trusts and other entities affiliated with Mr. Heppner that the Litigation Trustee alleges received more than $140 million in funds that were improperly transferred from GWG. The Litigation Trustee will continue to pursue claims against those entities.
The settlement amount is $50,500,000.
Whitley Penn LLP
Whitley Penn LLP (“Whitley Penn”) served as GWG’s financial statement auditor. The Litigation Trustee and Whitley Penn reached an agreement to settle the Litigation Trust’s claims. The settlement amount is $8,500,000. Settlement proceeds have been received.
Sabes Adversary Proceeding
In April 2024, the Litigation Trustee filed a lawsuit against GWG’s former CEO Jon Sabes, his brother, and several entities associated with the Sabes (the “Sabes Defendants”). The Litigation Trustee and the Sabes Defendants reached an agreement to settle the Litigation Trust’s claims. The settlement amount is $2,300,000. Settlement proceeds have been received.
Mayer Brown LLP
Mayer Brown LLP (“Mayer Brown”) served as GWG’s former counsel. The Litigation Trustee and Mayer Brown reached an agreement to settle the Litigation Trust’s claims. The settlement amount is $30,000,000. Settlement proceeds have been received.
Richards, Layton & Finger, P.A. (RLF)
Richards, Layton & Finger, P.A. (“RLF”) served as GWG’s former counsel. The Litigation Trustee and RLF reached an agreement to settle the Litigation Trust’s claims. The settlement amount is $5,000,000.
Paul Capital Advisors, LLC (PCA)
Paul Capital Advisors, LLC and its affiliates (“PCA”) and the Litigation Trustee reached an agreement to settle the Litigation Trust’s claims. The settlement provides for a $1,900,000 payment to the Litigation Trust and withdrawal of PCA’s proofs of claim totaling approximately $400 million.
Baker Tilly US LLP
Baker Tilly US LLP (“Baker Tilly”) served as GWG’s former auditor. The Litigation Trustee and Baker Tilly reached an agreement to resolve a confidential arbitration and settle the Litigation Trust’s claims. The settlement amount is $1,900,000.
Other Parties
The Litigation Trustee reached settlements with five other parties, which collectively totaled $110,333.46. The Litigation Trustee made a good faith determination that the economic value of these claims was substantially less than $5 million (and likely de minimus), and therefore that such settlements did not require Bankruptcy Court approval under Section 3.2(a) of the Litigation Trust Agreement. [ECF No. 1910 at § 3.2(a)]. Settlement proceeds have been received.
The gross settlement proceeds received on account of the foregoing settlements approved by the Bankruptcy Court total approximately $91.4 million, resulting in estimated net distributions to the Wind Down Trust of approximately $59 million to $60 million. The Litigation Trustee’s estimates of the amounts of any distributions are based on current estimates and assumptions, one or more of which may prove to be incorrect, and are subject to risks and uncertainties. As a result, the actual amount of any distributions may differ materially, perhaps in adverse ways, from such estimates.
Litigation Trustee’s Motions and Settlement Agreements
- Order Approving [2873] WDT’s Mtn for Order Approving Amt of Dimin Claim
- Order Approving [2749] R9019 Mtn to Approve RLF Settlement
- Order Approving [2751] R9019 Mtn to Approve Paul Capital Settlement
- Order Approving R9019 Mtn to App Baker Tilly Settlement
- Summary Paper Notice
- Amended Trustee’s R9019 Mtn to Approve BEN Settlement
- Summary Paper Notice
- Motion for Approving Settlement with Baker Tilly US, LLP
- Order for Non-Evidentiary Electronic Scheduling Conference (Jackson Walker Settlement).
- Exhibit B WDT Distribution (RLF, JW, PCA);
- Exhibit C WDT Distribution (All); and
- Distribution Estimations Exhibit B and Exhibit C.
- Motion Approving Settlement Agreement with Jackson Walker;
- Motion Approving Settlement Agreement with Richards Layton;
- Motion Approving Settlement Agreement with Beneficient; and
- Motion Approving Settlement Agreement with Paul Capital Advisors.
- Notice Concerning Exhibits – Richard Layton, Beneficient, Paul Capital; and
- Notice Concerning Exhibits – Jackson Walker.
- Order Approving Settlement with D&O Defendants
- Order Approving Settlement with Whitley Penn
- Order Approving Settlement with Sabes Defendants
- Order Approving Settlement with Mayer Brown
- Order Approving Entry of Bar Order
- Second Amended Notice of Hearing June 13, 2025 Hearings at 9:00 a.m. CST
- Order Resetting Time on June 3, 2025 Hearings to 1:30 pm from 9:00 am CST
- Motion to Approve Compromise Under Rule 9019 with Certain D&O Defendants and Exhibits
- Motion of Litigation Trustee and Settling Defendants for Entry of Bar Order in Connection with Settlement of Adversary Proceeding
- Motion to Approve Compromise Under Rule 9019 with Whitley Penn and Exhibits
- Motion to Approve Compromise Under Rule 9019 with Sabes Defendants and Exhibits
- Motion to Approve Settlement Agreement with Mayer Brown and Exhibits
- Notice with Regards to Exhibits
- Supplemental Exhibit to Litigation Trustee’s Motions for Entry of Orders Approving Settlement Agreements
- Estimated Distribution Model Best Case for L Bond Holders
- Second Supplemental Exhibit – Estimated Distribution Notice and Model
- GWG Wind Down Trust Budget
- GWG Litigation Trustee’s Supplemental Notice of Proposed Settlements
- Notice of Hearing for June 3, 2025
Pending Settlements
The following settlements have been filed and are pending Bankruptcy Court approval:
Beneficient
The Litigation Trustee entered into an Amended Joint Prosecution and Allocation Settlement Agreement with Beneficient, on behalf of itself and its subsidiaries (collectively, “Beneficient”). The Litigation Trustee believes that the agreement provides substantial benefits to the Litigation Trust and its beneficiaries. Most importantly, it eliminates any “race to collect” against the Heppner Related Parties[1] by ensuring that all monetary recoveries—whether obtained by the Litigation Trustee or by Beneficient (or its subsidiaries)—flow exclusively to the Litigation Trust for distribution under the confirmed Plan. The Agreement also creates a cooperative framework that facilitates coordinated prosecution of claims, streamlines access to information, allows the parties to share privileged information, and strengthens the Litigation Trust’s ability to hold the Heppner Related Parties accountable in the D&O Adversary Proceeding, while expressly preserving the Litigation Trustee’s independence. This settlement is pending Bankruptcy Court approval.
[1] The Agreement defines “Heppner Related Parties” to mean “Heppner and/or various entities and trusts affiliated with, related to, or controlled by Heppner, including the Heppner Affiliated Entities.” The Agreement, in turn, defines “Heppner Affiliated Entities” as the non-settling defendants in the D&O Adversary Proceeding, namely: The Bradley K. Heppner Family Trust; The Heppner Family Home Trust; The Highland Business Holdings Trust; The Highland Investment Holdings Trust; Beneficient Holdings, Inc.; Bradley Capital Company, L.L.C.; Elmwood Bradley Oaks, L.P.; The Highland Investment Holdings Trust; Timothy B. Harmon, solely in his capacity as trustee of The Highland Investment Holdings Trust; HCLP Credit Company, L.L.C.; HCLP Nominees, L.L.C.; Highland Consolidated, L.P.; and Research Ranch Operating Company, L.L.C.
Settlement Proceeds Summary
The following table summarizes the gross settlement proceeds, fees, expenses, and estimated net distributions from the approved and pending settlements:
Frequently Asked Questions
What is the total amount to be received from the settlements? How much are attorneys’ fees and expenses?
As of March 31, 2026, the Litigation Trust (or the Wind Down Trust, on behalf of the Litigation Trust) had received settlement proceeds totaling approximately $91.4 million from the D&O Settlement ($50 million), Mayer Brown ($30 million), Whitley Penn ($8.5 million), the Sabes Defendants ($2.3 million), and five other parties (which collectively totaled $110,333.46). As of March 31, 2026, these settlement proceeds resulted in an estimated net distribution of approximately resulting in estimated net distributions to the Wind Down Trust of approximately $59 million to $60 million.
The Litigation Trustee anticipates receiving the settlement proceeds from settlements with RLF ($5 million), PCA ($1.9 million), and Baker Tilly ($1.9 million) before July 31, 2026. The Litigation Trustee estimates that those settlements will result in an additional approximately $6 million distribution to the Wind Down Trust and estimated total distributions to the Wind Down Trust of approximately $65 to $66 million, as shown above. The Litigation Trustee estimates that all of the settlements approved by the Bankruptcy Court will collectively result in a distribution of approximately 3.912% to former GWG bondholders on account of their prepetition bond holdings (or $3,912 per $100,000 in pre-petition bond holdings), as shown below.
Please see the Settlement Proceeds Summary table above for a detailed breakdown of amounts, fees, and expenses associated with each settlement.
How much money will the Wind Down Trust distribute to WDT Interest holders from the settlement proceeds?
Based on the approved and pending settlements, the Wind Down Trust estimates that the cumulative distribution will be approximately 3.912% of the approximately $1.68 billion in pre-petition GWG L Bond holdings that are now classified as Series A1 WDT Interests. The anticipated distribution amount to a typical former GWG bondholder is as follows:
The percentages referenced above reflect the estimated distribution as a percentage of the approximately $1.68 billion in pre-petition GWG L Bond holdings (now Series A1 WDT Interests). However, for the reasons discussed below, former GWG bondholder claims significantly exceed the amounts the Litigation Trustee might recover as damages through litigation.
Why does the Litigation Trustee believe these settlements are best for the GWG Litigation Trust and the Wind Down Trust’s underlying interest holders?
The Litigation Trustee believes that the settlements are fair and are in the best interest of the WDT Interest holders.
Although the Litigation Trustee believes that the claims that have been asserted have merit, that does not mean that the Litigation Trust is guaranteed to win at trial. In evaluating the settlements, the Litigation Trustee must balance the strength of the claims against legal and practical considerations. In each of the cases being settled, the Litigation Trustee’s claims are legally complicated and the facts giving rise to those claims are complex. As a result, it is far from certain that the Litigation Trustee would win at trial or on appeal.
Moreover, litigating the claims would be expensive, and it could take many years to litigate through judgment and the appeals that would likely follow. In the meantime, the settling defendants would be spending the insurance or other resources that could be used to pay WDT Interest holders.
The Litigation Trustee weighed these litigation and collection risks against the benefits of settling now on the terms negotiated by the Litigation Trust. In the Litigation Trustee’s judgment, these settlements are in the best interests of the WDT Interest holders because they eliminate the risk that the Litigation Trust will receive less or nothing at all following a trial, and the settlements allow distributions to WDT Interest holders sooner rather than years from now.
Importantly, the Litigation Trust has reserved its claims against the Reserved Trust Action Defendants (i.e., Heppner-affiliated entities and trusts) that the Litigation Trustee alleges received over $140 million from GWG. The Litigation Trustee will continue to pursue these claims.
Are these settlements the only opportunity for WDT Interest holders to be paid from the Litigation Trust and/or Wind Down Trust?
No, the Litigation Trustee will continue pursuing and investigating other cases and claims which the Litigation Trustee expects (but does not guarantee) will result in additional recoveries. The following matters remain pending:
- Claims against the Reserved Trust Action Defendants (Heppner-affiliated entities and trusts) – The Litigation Trustee alleges that over $140 million ultimately flowed to these defendants.
- Holland & Knight LLP – Adversary Proceeding No. 25-03064.
- Foley & Lardner LLP – Arbitration (hearing scheduled for February 15, 2027).
- Ankura Consulting Group, LLC – Adversary Proceeding No. 26-3090.
- Jackson Walker LLP – The Litigation Trustee has withdrawn from the previously proposed settlement and will continue to pursue claims in coordination with the Successor Wind Down Trustee.
- In addition, the Litigation Trust is continuing to investigate claims against a number of other potential defendants, which may result in additional claims being filed and additional settlements. There can be no guarantee as to the outcome of these proceedings.
When will I receive a distribution from these settlement proceeds?
The Bankruptcy Court approved the Wind Down Trust’s resolution of the “Diminution Claim” on June 9, 2026. The Successor Wind Down Trustee currently is working expeditiously to distribute the settlement proceeds received from the Litigation Trust. The Successor Wind Down Trustee anticipates making a distribution to the WDT Interest Holders in the near future.
The Wind Down Trust will post updates about the distribution timeline to the Trust website, as well as an anticipated date for payment.