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Legal Woes Far From Over for Tony Thompson

A growing number of investors with money in investments connected to Tony Thompson and his TNP Note Programs are far from happy campers these days.  Thompson and his firm, Thompson National Properties LLC, operate several note programs, including the TNP Strategic Retail Trust, the TNP 2008 Participating Notes Program and the TNP 12 Percent Notes Program.

The concerns by some investors include allegations of misleading sales practices and unsuitable investment sales on the part of Thompson and his broker/dealer TNP Securities, as well as by various independent financial advisers who sold investments in the TNP Notes Programs. Specifically, some investors allege that the TNP Notes were sold as investments suitable for conservative income-seeking investors looking for safe returns and low risk.

In reality, the TNP Notes were speculative, high risk and lacked liquidity.

Troubles came to a head last summer, when investors in the TNP 12 Percent Notes Program were informed that the private placement planned to halt interest payments with the intention of restarting them this year. However, investors would see “significantly” lower interest payments, and the notes’ maturity was extended until 2016, according to a filing with Securities and Exchange Commission (SEC).

As reported in a November 2012 story by Investment News, Thompson National Properties is facing a federal lawsuit in Colorado from two investors in the TNP 12 Percent Notes Program. The investors, Doug and Sheryl Hitchens, filed a complaint in September 2012 in U.S. District Court in Colorado alleging damages from the company’s breach of a guarantee on the note, failure to pay interest on the note and refusal to redeem the note. In 2008, the couple purchased a note of $100,000 from Thompson.

In January 2013, Thompson’s legal and financial problems worsened when he and Thompson National Properties LLC were again sued in federal court in Colorado over failure to make payments on the TNP 12 Percent Notes Program. Thompson National Properties sold the TNP 12% Notes Program in 2008 and 2009 to fund the company, raising $21.5 million from 400 investors.

The couple who sued Thompson in January was Darrell and Diane Elliott. In their claim, they stated that TNP “had failed to make required interest payments on the note.” The couple purchased a note of $100,000 in 2008.

“Thompson National has failed to fulfill its obligation under the guarantee,” according to the complaint. TNP was obligated to repay the principal by 2011 but missed that deadline. It then stopped making interest payments in 2012 but has indicated that it intends to pay the remaining interest and principal by June.”

An attachment to the lawsuit included a guarantee signed by Thompson, stating that Thompson National Properties “hereby unconditionally guarantees the performance of all the company’s obligations under the notes, including, without limitation, the payment of principal and interest.”

Meanwhile, a Jan. 25, 2013, story by Investment News, says that Thompson has continued to downplay any financial difficulties concerning his companies.

The note defaults were due to “timing and in process of cure,” Thompson said in the article. In another e-mail to Investment News, Thompson wrote that TNP made payments to note holders Jan. 21.

If you are an investor in one of Thompson’s TNP Note Programs and have suffered significant financial losses because of what you believe is misrepresentation on the part of Thompson, his company, or another broker/dealer, contact us to tell your story.

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