When you invest in properties on the app, we want to make sure that no matter the state of Landa, your investment remains separate from such a situation. This is a key principle of our operation. When you purchase shares in the app, the debts and liabilities in your Series will be separate from the debts and liabilities of the series’s parent company.
We take several steps to make sure that each Series operates as its entity:
- Each Series holds title to a property and does not share title with another Series or its parent company.
- Each series maintains its books and records.
- Each series maintains its bank account and does not hold money for any other Series.
- Each Series has its mortgage (no cross-collateralization).
- Each Series guarantees zero debts of another Series.- Each Series has its insurance policy (not part of an umbrella policy).In our parent company debt agreement, we (Landa Holdings, Inc.) and the lender signed that the Series LLCs are not collateral for the debt that we (Landa Holdings, Inc.) take on, therefore the properties in the app are not collateral for our (Landa Holdings. Inc.) day-to-day business operations.
In the event of a bankruptcy - the bankruptcy is managed by the bankruptcy court and we can’t guarantee the outcome. As with any other investment, there is always a risk of losing your investment. We are not aware of any court case that has tested the limitations of the series structure in federal bankruptcy courts, and it is possible that a bankruptcy court could determine that the assets of one Series should be applied to meet the liabilities of the other Series or the liabilities of our company generally. This concern is very important to us. Furthermore, for the full risk factors list, you can review our SEC filings here.