Beneficient (NASDAQ:BENF) (the "Company"), a technology-enabled platform providing exit opportunities and primary capital solutions and related trust and custody services to holders of alternative assets, today announced that it has formulated and is implementing a comprehensive strategy intended to eliminate both the fraudulent indebtedness asserted by HCLP Nominees, L.L.C. ("HCLP") and the equity interests in Beneficient and its subsidiaries held by the Company’s former Chief Executive Officer, Brad Heppner, and his affiliated entities ("Heppner Equity Interests"). Through the strategy, the Company also seeks to terminate all other remaining agreements with Heppner or his affiliated entities ("Heppner Agreements") and have all amounts purportedly owed to them by Beneficient or its subsidiaries under those agreements or otherwise deemed void and unenforceable. The strategy follows Heppner’s May 2026 federal fraud conviction and is a significant component of the Company’s broader effort to transform its balance sheet, simplify its capital structure, and unlock its potential. The Company continues to operate its business and pursue its long-term growth objectives while implementing the strategy.

As previously disclosed, Heppner was convicted on May 7, 2026, of securities fraud, wire fraud and related charges in connection with a fraudulent scheme to enrich himself. The criminal trial revealed overwhelming evidence that Heppner fraudulently concealed his control of HCLP and fabricated the purported HCLP debt. The Company believes the conviction provides substantial support for its position that the purported HCLP debt is invalid and unenforceable. The Company further believes that Heppner’s fraud and other misconduct support substantial claims for damages and other relief, including the elimination of the Heppner Equity Interests and the termination of the Heppner Agreements.

The Company is actively pursuing a consensual resolution with Heppner, with the objective of completing it before his sentencing, currently scheduled for October 21, 2026. The proposed resolution is designed to achieve a complete separation from Heppner, assist him in making restitution to other victims of his criminal conduct, and would include:

  • the elimination of the contested HCLP debt, including approximately $130 million of principal and accrued interest;
  • the conversion and exchange of all the Heppner Equity Interests, including preferred equity of a Company subsidiary with an aggregate liquidation preference of approximately $850 million, into an aggregate of 162,132 shares of the Company’s Class A common stock;
  • the termination or voiding of all remaining contractual arrangements involving Heppner or his affiliated entities and the extinguishment, without payment, of all amounts purportedly owed under those arrangements or otherwise, totaling approximately $88 million.