Beneficient Seeks Resolution to Eliminate About $130 Million of Disputed Debt Linked to Former CEO

Beneficient (NASDAQ:BENF) said it is seeking an agreement with former Chief Executive Officer Brad Heppner that would eliminate approximately $130 million of disputed debt and restructure his remaining equity and contractual interests in the company.

Heppner was convicted on May 7, 2026, of federal charges including securities fraud and wire fraud. According to Beneficient, evidence presented during the criminal trial related to Heppner’s control of HCLP Nominees, L.L.C. and debt attributed to that entity.

The company said it is seeking a consensual resolution with Heppner ahead of his sentencing, which is currently scheduled for October 21, 2026. No definitive agreement has been signed.

Proposal Covers Debt, Equity and Contractual Interests

Under the proposed resolution, approximately $130 million of contested HCLP principal and accrued interest would be eliminated.

Heppner’s equity interests, including preferred equity carrying an aggregate liquidation preference of approximately $850 million, would be converted into 162,132 shares of Beneficient Class A common stock.

The proposal would also terminate remaining contractual arrangements between Beneficient and Heppner or affiliated entities. The company said this would extinguish approximately $88 million in amounts that it describes as purportedly owed.

If completed on the proposed terms, Beneficient said the transaction would eliminate substantially all of its debt.

Governance Rights Would Also End

The proposed agreement would also end Heppner’s ownership of Beneficient Class B common stock and remove associated super-voting, board-appointment and consent rights, according to the company.

“Our objective is a complete separation through the elimination of the purported HCLP debt and all of Mr. Heppner’s remaining equity, contractual and governance interests in the Company,” Chief Executive Officer James G. Silk said.

Beneficient cautioned that there is no assurance it will reach a consensual resolution with Heppner.

If the negotiations do not result in an agreement, the company said it is prepared to pursue legal claims against Heppner, HCLP and affiliated entities.

Beneficient stock price