GPB Investor Updates

GPB Investor Updates

This section of our website was developed as a way to strengthen our communication with our investment community. We will regularly update this page based on new developments and we encourage our investment community to utilize this as a resource going forward. Our team will continue to work to provide up-to-date information and address questions about each Partnership, and about GPB Capital, in this central location.

GENERAL QUESTIONS

Can you explain more about the assets that GPB Capital manages?

  • GPB Capital continues to manage and oversee certain assets, which are held within a number of multi-strategy and single-strategy Partnerships across the Technology-Enabled Services, Energy, Corporate, Waste and Real Estate sectors.
  • Each Partnership’s assets are managed separately from the assets of the other Partnerships.
  • We will update this website with new information as it becomes available. We encourage you to utilize the website to keep apprised of new developments. The estimated fair value of each Partnership was reported to investors on a Partnership-by-Partnership basis in January 2022.
  • We continue to evaluate and consult with the independent Monitor as to whether and when the disposition of certain assets would be most advantageous to limited partners.

What is GPB Capital currently focused on?

  • Our management team is working in conjunction with the Board of Highline and our independent Monitor on the retention or disposition of certain assets on a Partnership-by-Partnership basis to realize our shared goals of maximizing value and distributions to investors.
  • While the timing may differ for each Partnership, we are focused on ultimately winding down the Partnerships and returning the capital we realize from the individual Partnerships to investors in those Partnerships. We will be providing more details regarding the timing of distributions and Partnership wind-down.

Who is involved in the current management of GPB Capital?

  • Rob Chmiel, who first joined GPB Capital in November 2019 as Chief Financial Officer, became the Chief Executive Officer effective February 2021, upon the resignation of David Gentile. Michael Emanuel joined the Company as General Counsel in August 2020. Each is also a management team member of Highline.
  • GPB Capital’s former Chairman and CEO, David Gentile, resigned from GPB Capital in February 2021, and at that time also resigned from the boards of all portfolio companies owned by the Partnerships. He has no role in the operations of GPB Capital, in any of the Partnerships we manage, or in the Partnerships’ respective portfolio companies.
  • Additionally, Highline has established an independent Board of Directors to oversee the operation and management of the individual Partnerships and help provide governance across the Partnerships. Specific information about each Highline Director is contained in recent filings with the Securities and Exchange Commission (“SEC”), found here.

What is Highline Management?

  • In January 2020, Highline was organized to, among other things, provide independent operational support and management services to the Partnerships and to implement additional corporate governance around GPB Capital, which included establishing an independent Board of Directors to oversee the Partnerships and their investments.
  • Highline manages the day-to-day operations of the Partnerships, subject to the oversight of the Highline Board of Directors.
  • Highline’s duties include developing corporate strategy, managing risk, and overseeing the execution of operational initiatives. Highline also oversees all Partnership-level accounting functions, leads the preparation of financial statements, and manages audit processes, among other functions.

What are the details of the Monitorship?

  • In February 2021, pursuant to an Order of the Court entered in the SEC’s action filed against GPB Capital and others, an independent monitor (“Monitor”) was appointed to oversee GPB Capital. The Order governing the monitorship was consented to between the SEC and GPB Capital, and provides that the Monitor will remain in place until further Order of the Court.
  • As outlined in the Order appointing the Monitor, the Monitor’s responsibilities include, among other things, the authority to review and approve or disapprove all material activities of GPB Capital, Highline, and the Partnerships and their portfolio companies.
  • We have worked diligently with the Monitor on behalf of investors to maximize value of the Partnerships’ assets that will be available for distribution to investors. This cooperation has led to the positive developments in Partnership valuations and portfolio company sales (i.e. Prime Automotive Group and Alliance Physical Therapy Partners) within GPB Automotive Portfolio, LP and GPB Holdings II, LP. In addition, with guidance from the Monitor, our management team seeks to strengthen the asset management oversight and corporate governance across all Partnerships.
  • You may view all Monitor information by visiting this link.

Where can I receive additional information or guidance about the Partnership in which I invested?

  • We have updated our website as part of our effort to better serve investors and provide relevant updates in a timely manner. Our team continues to work closely with the Monitor to provide investors with the most current information about their investments.
  • We are working to continue improving our communication with investors, including providing regular updates about the completion of outstanding audits, key filings, and other financial information pertaining to the Partnerships.
  • Additionally, we plan to provide written Partnership-specific communications to investors within a particular Partnership promptly upon the occurrence of any material event.
  • For our most recent updates pertaining to portfolio companies and assets of the Partnerships, please visit the Investment News page

What is the status of distributions?

  • We know that distributions are a top priority for our investors, and we are working diligently to develop distribution plans for each of our Partnerships. These plans involve determining how and when portfolio companies will be sold and when distributions will be made to investors of each Partnership.
  • The timing and amount of distributions will vary among the Partnerships. We will be providing more detailed information for each Partnership in the near future. Investors in each Partnership will be notified separately regarding distributions, as that information becomes available.

Can I withdraw or exit my interest in a Partnership?

  • At this time, investors are not permitted to redeem, liquidate, or surrender their interest in any Partnership.

When is the next investor call?

  • Currently, we are not holding investor calls.
  • As noted above, we are working to provide investors with more regular updates, and are continuing work to increase our ability to share more information in a variety of formats, including through this website, to help meet the needs of investors.

When can I expect updated Fair Market Value(s)? (Updated as of 3/31/22)

  • We realize that information on each Partnership’s current fair market value (“FMV”) is extremely important to investors in the Partnerships. To that end, management has engaged an internationally recognized, top-tier valuation firm to conduct an independent FMV analysis of certain Partnerships’ assets.
  • In January 2022, we issued 9/30/21 estimated FMVs. We are currently in the process of issuing updated estimated FMV statements to reflect estimated Partnership values as of 12/31/21. These will be communicated to investors, and will be issued upon approval by GPB Capital’s Valuation Committee, the Highline Board of Directors, and the Monitor. (Updated as of 3/31/22)
  • *Please note that any FMV reported will represent the fair value of Partnership assets as of a noted point in time, and may represent a value different from the US GAAP carrying value that is reported in audited financial statements.

Will the K-1 process improve? (Updated as of 9/13/22)

  • We know that many investors have been frustrated by historical delays in the delivery of Schedule K-1s for the various Partnerships. To address this issue, we recently secured one of the “Big Four” accounting firms to assist us, with the goal of significantly improving the K-1 process. Unfortunately, the transition to our new provider, itself, was in part responsible for a delay in furnishing 2020 K-1 statements to investors. We do not anticipate such delays, going forward.
  • We have made significant progress with respect to tax year 2021. On March 30, 2022, final 2021 K-1 statements were issued to GPB Cold Storage, LP investors, and are available for download on the client web portal. On March 31, 2022, final 2021 K-1 statements were issued to Armada Waste Management, LP investors, and are available for download on the client web portal. On April 18, 2022, final 2021 K-1 statements were issued to GPB NYC Development, LP investors, and are available for download on the client web portal. On August 29, 2022, final 2021 K-1 statements were issued to GPB Automotive Portfolio, LP investors, and are available for download on the client web portal. On September 9, 2022, final 2021 K-1 statements were issued to GPB Holdings, LP investors, and are available for download on the client web portal. On September 10, 2022, final 2021 K-1 statements were issued to GPB Holdings II, LP investors, and are available for download on the client web portal. (Updated as of 9/13/22)

Can you comment on specific transactions?

  • As we explore a range of opportunities to maximize Partnership asset values and maximize cash flow, we are constantly evaluating the retention or disposition of assets.
  • Realizing the best value for investors requires that we agree to keep potential transactions confidential until we reach a final agreement. The best recent example of this process was our sale of Prime Automotive Group, which occurred after months of work but was not publicly announced until September 2021 (and which later closed on or about November 17, 2021).
    Additionally, in certain instances, pending litigation limits our ability to provide more detailed information.
  • We are working diligently to provide better and more thorough communication to investors, and will continue to update our investment community in a variety of formats, including through this website, as more information becomes available. We would also encourage the use of the SEC Filings and Investment News sections of this website as resources to be relied upon going forward.

How do I contact GPB Capital Holdings, LLC?

  • All inquiries may be sent to info@gpb-cap.com. We will get back to you as soon as possible. We are not able to offer phone support at this time.
  • Please note that we are limited in the information we are able to share with any individual investor or advisor. We expect to update this website periodically to address additional questions received.

GPB AUTOMOTIVE PORTFOLIO, LP (“AP”)

Can you provide more information about the Prime Automotive Group sale?

  • In September 2021, direct and indirect subsidiaries of AP and GPB Holdings II, LP (“H2”) entered into a Material Definitive Agreement to sell substantially all of the automotive assets of Prime Automotive Group (“Prime”) for approximately $880 million.
  • Thereafter, in November 2021, AP filed a Form 8-K with the SEC, which provided additional details about the sale of Prime to Group 1 Automotive, Inc. (NYSE: GPI) (“Group 1”).
  • This sale closed successfully on November 17, 2021.
    Following this sale, GPB Capital, in conjunction with the Monitor, is working to wind down the AP Partnership, and begin to distribute available proceeds to AP investors.

When can I expect a distribution following the sale of Prime?

  • We are working in conjunction with the Monitor to develop a plan to distribute available proceeds to investors in both AP (which owns 66.5% of Prime) and H2 (which has a 33.5% stake in Prime). We will provide additional information about distributions as soon as we are able.
  • We are not at this time able to provide detailed information about the timing or amount of a distribution event.
  • We will notify investors as additional information becomes available.

What is the status of the AP audit?

  • On May 14, 2021, we filed a Registration Statement on Form 10 for AP, as required by the SEC under the Securities Exchange Act of 1934. The full filing and subsequent amended filings can be found here.
  • The amended Form 10 filed on September 9, 2021 provides three years of independent financial statement audits of AP (calendar 2018, 2019 and 2020), as well as interim, unaudited financials for the six months ending June 30, 2021. These audits of the Partnership were performed by a nationally recognized, independent accounting firm.
  • On November 15, 2021, AP filed with the SEC its Form 10-Q, or quarterly report, for the quarterly period ended September 30, 2021. The SEC filings page can be found here.
  • As noted above, on November 23, 2021, AP filed with the SEC a Form 8-K in connection with the closing of the transaction to sell Prime.

GPB HOLDINGS II, LP (“H2”)

What is the impact of the Prime Automotive Group sale for H2 investors?

  • In September 2021, direct and indirect subsidiaries of GPB Automotive Portfolio, LP (“AP”) and H2 entered into a Material Definitive Agreement to sell substantially all of the automotive assets of Prime for approximately $880 million. This sale closed successfully on November 17, 2021.
  • For more information about this transaction, we direct AP and H2 investors to a Form 8-K recently filed by AP in connection with the Prime transaction, which can be found here.
  • We are working in conjunction with the Monitor to develop a plan to distribute available proceeds to investors in both AP (which owns 66.5% of Prime) and H2 (which has an automotive retail segment that includes a 33.5% stake in Prime).
  • We will provide additional information around distributions as soon as we are able.

What is the impact to H2 investors of the Alliance Physical Therapy Partners, LLC sale?

  • On December 23, 2021, the sale of Alliance Physical Therapy Partners, LLC (“Alliance”) was finalized. You may access the press release regarding this transaction here.
  • The transaction marks a successful exit from one of the five reportable segments of H2, and returned approximately a 2x multiple on invested capital – value that will not be reinvested but returned to investors.
  • We are working to develop a plan to distribute available proceeds to H2 investors.

Following the sale of Prime Automotive Group, what assets does H2 own?

  • H2 consists of investments in the Technology-Enabled Services, Energy, and Corporate sectors, as noted in the November 24, 2021 communication to H2 investors, which can be accessed on the investor portal.
  • We continue to analyze assets within each sector to determine how to best maximize value and, ultimately, a return to investors.

What are the next steps for H2?

  • Following the sale of Prime and Alliance, H2 continues to actively manage investments in the Technology-Enabled Services, Energy, and Corporate sectors.
  • Based upon our ongoing analysis of these investments, performed in conjunction with the Monitor, we have determined that there are certain assets for which near-term disposition is advantageous. For these assets, we continue to work through the transaction processes necessary to effect the optimal exit.
  • We have also identified certain assets within the portfolio that we believe should continue to be managed until such time when disposition can be advantageous. These assets are within markets where we believe the likelihood of a positive trajectory can be obtained.
  • We will provide more information in the future regarding potential exit timing of these assets.

What is the status of the H2 audit? (Updated as of 5/26/22)

  • On May 13, 2022, we filed a Registration Statement on Form 10 (“Form 10”) for H2 (the “Partnership”), under the Securities Exchange Act of 1934 (the “Exchange Act”). The full filing can be found here: https://gpb-cap.com/secfilings/.
  • The Form 10 provides three years of independent financial statement audits of H2 (calendar years 2019, 2020, and 2021). These audits of the Partnership were performed by a nationally recognized, independent accounting firm and mark the completion of independent audits for more than 90 percent of assets that GPB Capital manages.
  • We will provide you with additional information regarding the Partnership as we engage with the SEC to make this Form 10 effective, and enter into the Partnership’s reporting obligations pursuant to the Exchange Act.

GPB HOLDINGS, LP AND GPB HOLDINGS QUALIFIED, LP (“H1”)

What is the status of H1?

  • H1 has exited all operating company investments of value, and we expect to wind H1 down over the next 12-24 months.
  • We continue to evaluate all options for maximizing value for investors. This includes assessing the potential for recovery of value from third parties.
  • Though we are not able to provide specifics on any pending legal matter, the H1 Partnership is a plaintiff in an ongoing litigation against a former operating partner in which our sole aim is to recover all claimed damages.

What is the status of the H1 audits?

  • The firm that had been engaged to conduct the outstanding audits for H1 has resigned and the audits have not been completed. We are working to determine next steps related to the distribution of unaudited financial statements for H1 and will provide additional guidance once available.

GPB COLD STORAGE, LP (“Cold Storage”) (Updated as of 4/26/22)

What is the status of Cold Storage?

  • In April 2022, we finalized the sale of the ±30-acre parcel of land that Cold Storage owned as a result of two separate transactions. The first transaction, which occurred in 2016, resulted in Cold Storage’s acquisition of a 22-acre property in the Port of Newark sub-market with unparalleled logistical access to the Port of Newark, the Port of Elizabeth and New York City. In 2020, Cold Storage acquired an adjacent 8-acre property to create one of the largest contiguous pieces of underdeveloped land in Newark.
  • As with other Partnerships, we are not at this time able to provide detailed information about the timing or amount of a distribution. We are focused on finalizing a plan to distribute the available proceeds from the Partnership as soon as possible, subject to the approval from our independent court-appointed Monitor.

What is the timing of the Cold Storage audit?

  • On November 2, 2021, the outstanding audited financial statements for Cold Storage for the year ended December 31, 2020 were completed and made available to investors.
  • Audits for calendar year 2019 were completed and made available to investors in September 2021.

GPB NYC DEVELOPMENT, LP (“NYCD”) (Updated as of 3/31/22)

What is the status for NYCD?

  • We continue to work in conjunction with the Monitor to determine the most advantageous wind-down strategy for the Partnership.
  • Certain available net proceeds from the remaining residential units and retail space will go toward the repayment of outstanding loans for the project. The outstanding debt on this project is significant, and we are continuing to work with our debt counterparties related to repayment of these loans. We will be able to report on the FMV of NYCD, if any, after the completion of this work.

Can you provide updated sale information with regard to the units at the property?

  • NYCD has successfully closed on, or is under contract to close on, 45 of the 48 condo units at the property, and is actively working to sell the 3 remaining units. (Updated as of 3/31/22)
  • New York City’s real estate market has seen a tremendous amount of uncertainty resulting from the ongoing COVID-19 pandemic, and it is unclear how long it will take to sell the remaining residential units.
  • Lingering impacts from the pandemic have presented an acute challenge for retail space, in terms of both depressed demand and pricing, and have complicated our efforts to find a suitable tenant.
  • We have repaid certain project-level loans with the net proceeds received from the sale of condo units. However, additional debt remains both at the project and partnership level. We will update you with more information as soon as possible regarding the pay-down of remaining outstanding debts, and whether we expect any proceeds to be available to investors.

What is the status of the NYCD audits?

  • The firm that had been engaged to conduct the outstanding audits for NYCD has resigned and the audits have not been completed. We are working to determine next steps related to the distribution of unaudited financial statements for NYCD and will provide additional guidance once available.

ARMADA WASTE MANAGEMENT, LP (“AWM”) (Updated as of 3/31/22)

What is the outlook for AWM?

  • We primarily own assets in the waste management sector from Ohio to West Virginia that include operating companies and real estate assets.
  • Based upon our ongoing analysis of these investments, performed in conjunction with the Monitor, we have determined that there are certain assets for which near-term disposition is advantageous. For these assets, we continue to work through transaction processes necessary to effectuate the optimal exit.
  • If AWM is able to realize a successful disposition of assets, the subsequent goal is to wind down the Partnership and distribute all remaining available proceeds to investors.

What happened to the waste management assets in New York?

  • In March 2020, AWM divested several assets, including those located in New York. AWM no longer owns any waste management assets in New York.

What’s the status of the current assets in the AWM business?

  • We recently engaged in a series of transactions to sell certain assets within the portfolio. We continue to evaluate options for the remaining assets, in conjunction with the Monitor. We look forward to sharing additional information as soon as we are able to do so. (Updated as of 3/31/22)

What is the status of the AWM audits?

  • The firm that had been engaged to conduct the outstanding audits for AWM has resigned and the audits have not been completed. We are working to determine next steps related to the distribution of unaudited financial statements for AWM and will provide additional guidance once available.

GPB AUTOMOTIVE INCOME FUND, LTD (“AIF”)

What is the status of AIF’s principal and interest payments?

  • AIF has suspended principal and interest payments until the distribution plans are finalized for GPB Automotive Portfolio, LP (“AP”).
  • This will not occur until the AP distribution plan is presented to and approved by the Monitor. We will update investors as soon as information becomes available to share.
  • We will soon begin to reach out to individual AIF investors with guidance about additional information they will be required to provide prior to receiving any future distributions.

What is the status of the AIF audit?

  • Outstanding audits for AIF are still in process. There is currently no information available as to an expected completion date, but we will provide additional guidance once available.
  • Regarding AP, on May 14, 2021, we filed a Registration Statement on Form 10 for AP, as required by the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934. The full filing and subsequent amended filings can be found found here.
  • The amended Form 10 for AP filed on September 9, 2021 provides three years of independent financial statement audits for AP (calendar 2018, 2019 and 2020), as well as interim, unaudited financials for the six months ending June 30, 2021.
  • AP also filed a Form 10-Q, and a form 8-K in connection with the Prime transaction. To view all regulatory filings, please visit the SEC filings section of our website.

Can you provide more information on the sale of Prime Automotive Group?

  • In September 2021, direct and indirect subsidiaries of AP and GPB Holdings II, LP (“H2”) entered into a Material Definitive Agreement to sell substantially all of the automotive assets of Prime Automotive Group (“Prime”) for approximately $880 million. Thereafter, AP filed a Form 8-K, which provided additional details about the sale of Prime to Group 1 Automotive, Inc. (NYSE: GPI) (“Group 1”).
  • This sale successfully closed on November 17, 2021. While we expect that the available proceeds from this transaction will be reflected in the distribution strategy of AP, at this time we are not able to provide you with more definitive guidance as to the timing or amount of distributions that may be available to AIF investors.