Business Development Corporation of America II, a non-traded business development company sponsored by AR Capital, has filed preliminary proxy materials with the SEC in which they seek stockholder approval to sell all or substantially all of the company’s assets and to liquidate and dissolve the company.
If the plan is approved, the company will dispose of all of its debt investments as soon as practicable, which they expect to accomplish by March 15, 2016.
Most notably, BDCA II plans to distribute $9.00 per share back to investors whether or not they raise enough through the sales of the assets to cover it.
If there are insufficient funds for the distribution, the adviser has agreed to cover the balance.
The adviser also agreed to reimburse stockholders for any selling commissions or dealer manager fees that were paid with proceeds from their stock purchases.
The company indicated that it will pay for its liabilities and expenses by possibly purchasing insurance or establishing a reserve fund. The proxy materials state that investors should receive full payment no later than 24 months after stockholder approval of the plan of liquidation.
BDCA II broke escrow in September 2015 and has raised $3.2 million in investor equity to date, according to the most recent Stanger Market Pulse. The company sold shares at $10.00 each. The board terminated the offering on December 9, 2015 following a series of scandals surrounding AR Capital, its sponsor, and Realty Capital Securities, its dealer manager, which led to the termination of all AR Capital-sponsored investment programs and an agreement by RCS to terminate its business.