If you invested in Moody National REIT or Moody National REIT II, the recent approval of a liquidation and dissolution plan is a critical development. Haselkorn & Thibaut, P.A. (InvestmentFraudLawyers.com) represents investors nationwide in claims involving non-traded REITs, including Moody National REIT. This guide explains what the liquidation means, key risks for investors, and practical recovery options if Moody National REIT was mis-sold or unsuitable for your portfolio.
What Happened With Moody National REIT II
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Shareholders of Moody National REIT II approved a plan to liquidate and dissolve the company. Moody National REIT historically focused on select-service hospitality properties branded by Marriott, Hilton, and Hyatt. The REIT suspended its public offering in March 2020, halted distributions and its share repurchase program, and faced multiple loan maturities. As part of winding down, Moody National REIT reported several property sale agreements with closings expected on a staggered timeline, subject to customary adjustments.
In a liquidation, Moody National REIT will sell remaining assets, pay debts and liabilities, and distribute residual proceeds to shareholders. For investors in Moody National REIT, this process is complex: net proceeds are uncertain, timing can vary, and debt, fees, and transaction costs can significantly reduce distributions to common shareholders.
Key Investor Risks in Moody National REIT
- Uncertain net proceeds: The gross sale prices announced by Moody National REIT are reduced by closing costs, prepayment penalties, taxes, reserves, and debt paydown. This can materially lower what investors actually receive.
- Timing and market risk: Staggered closings, potential re-trades, and changing hospitality market conditions can affect the final outcome for Moody National REIT investors.
- Leverage and maturities: Non-traded hospitality REITs like Moody National REIT often carry property-level debt. High loan-to-value ratios and maturing loans may absorb sale proceeds before equity distributions.
- Liquidity and income suspensions: Moody National REIT previously suspended distributions and its share repurchase program. For many investors, this eliminated expected income and access to liquidity for years.
- Valuation volatility: Interim NAVs for non-traded REITs like Moody National REIT can lag market realities. Liquidation may crystallize losses not fully reflected in prior statements.
Red Flags: Was Moody National REIT Suitable for You?
Haselkorn & Thibaut investigates whether Moody National REIT recommendations were appropriate and properly supervised. Common sales-practice issues include:
- Overconcentration in Moody National REIT and other illiquid alternatives relative to your risk tolerance and liquidity needs.
- Inadequate disclosure of Moody National REIT liquidity limits, the potential for suspended redemptions, and distribution cuts.
- Misrepresentations or omissions about fees and risks associated with Moody National REIT.
- Recommending Moody National REIT to retirees or income-focused investors without explaining cyclical hospitality risks.
- Use of margin or credit lines to buy illiquid REITs like Moody National REIT, increasing downside exposure.
If your broker or advisor did not fully disclose risks or concentrated you in Moody National REIT, you may have claims for losses independent of the liquidation process.
Recovery Options for Moody National REIT Investors
You are not limited to waiting for liquidation distributions. Investors in Moody National REIT often pursue recovery through:
- FINRA Arbitration: Most investor disputes with broker-dealers are resolved in FINRA arbitration. Claims commonly include unsuitability, misrepresentation, failure to supervise, breach of fiduciary duty (where applicable), and negligence. We frequently handle these cases on a contingency basis.
- State securities and consumer protection claims: Depending on your facts and the parties involved, state “blue sky” laws and consumer protection statutes can strengthen Moody National REIT claims.
- Mediation and settlement: Many Moody National REIT disputes resolve through mediation, particularly when documentation shows overconcentration or compliance failures.
Pursuing a claim generally does not prevent you from receiving any liquidation distributions from Moody National REIT. Both can proceed in parallel.
Don’t Miss Deadlines
Strict time limits apply to Moody National REIT claims. FINRA eligibility rules and state statutes of limitations can bar late filings—even if your losses are significant. Because Moody National REIT events occurred over multiple years (distribution suspensions, halted redemptions, and liquidation), prompt review is essential to preserve your rights.
How to Prepare Your Moody National REIT Case
Gather and organize:
- Statements showing purchases and holdings of Moody National REIT or Moody National REIT II
- New account forms, risk questionnaires, investment policy statements
- Trade confirmations and written proposals
- Offering documents (prospectus/PPM) and risk disclosures for Moody National REIT
- Emails and notes about income expectations, liquidity, and the share repurchase program
- Notices about distribution suspensions, valuation changes, and liquidation updates
Reconstruct the recommendation:
- What were you told about Moody National REIT income, liquidity, and risk?
- Were you encouraged to rely on Moody National REIT distributions for living expenses?
- Did your advisor explain the potential for suspended redemptions and long holding periods?
Quantify exposure:
- Total invested in Moody National REIT versus current value plus distributions received
- Overall concentration in illiquid alternatives beyond Moody National REIT
- Any use of margin or borrowing to purchase Moody National REIT shares
Hospitality-Specific Considerations for Moody National REIT
- Cyclicality: Occupancy, ADR, and RevPAR are sensitive to economic cycles and travel demand—material for a hotel-focused REIT like Moody National REIT.
- Interest rates: Higher rates increase debt service and impact cap rates, affecting asset values and sale proceeds for Moody National REIT properties.
- Regional dynamics: Market-by-market performance varies; localized fundamentals influence outcomes on individual Moody National REIT assets.
- Post-pandemic normalization: Business travel and group bookings recovered unevenly, impacting hotel REITs like Moody National REIT.
If these risks were downplayed or not clearly explained when you were sold Moody National REIT, you may have actionable claims.
How Haselkorn & Thibaut Helps Moody National REIT Investors
Haselkorn & Thibaut, P.A. focuses on representing investors in disputes against brokerage firms and financial advisors nationwide. We have extensive experience with non-traded REITs like Moody National REIT.
- Free, confidential case review for Moody National REIT investors
- Contingency fee representation in most cases (no attorney’s fees unless we recover)
- Document-driven strategy focused on suitability, disclosure, and supervision
- Nationwide representation for individual investors, retirees, trusts, and institutions
If you invested in Moody National REIT and are concerned about your recovery or how the investment was sold, contact Haselkorn & Thibaut at InvestmentFraudLawyers.com for a no-obligation consultation. Acting promptly helps preserve evidence and meet deadlines for Moody National REIT claims.
