Investors who bought non-traded shares of American Hospitality Properties REIT or REIT II, which Phoenix American Hospitality sponsored and managed, between March 1, 2022 and July 31, 2024 may be covered by a proposed securities class action alleging the companies made false or misleading statements to investors. No class has been certified and there is nothing to file yet.
Allegations Only · No Settlement Yet
This article describes a class action complaint and a settled SEC enforcement case. The statements below are unproven allegations. Phoenix American Hospitality and the other defendants have not been found liable, there is no certified class, and nothing to claim at this time. This page is informational and is not legal advice.
What Is This About?
Proven Business Skills Inc. filed a proposed securities class action in September 2026 in the U.S. District Court for the Northern District of Texas in Dallas, No. 3:26-cv-03130. The defendants are Phoenix American Hospitality, LLC, a Dallas company that sponsored two non-traded real estate investment programs; the two programs, American Hospitality Properties REIT, Inc. and American Hospitality Properties REIT II, Inc.; and Phoenix American Hospitality’s president.According to the announcement from the plaintiff’s law firm, the complaint alleges the defendants made materially false or misleading statements and omissions to people who bought shares in the two REITs from March 1, 2022 through July 31, 2024, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act and Rule 10b-5. The complaint itself was not publicly available as of November 13, 2026. The defendants have not responded to it in any public filing, and no court has decided whether the claims have merit.
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What the SEC Alleged About the Two REITs
The class period matches the period covered by a federal enforcement case. On June 4, 2026, the U.S. Securities and Exchange Commission sued Phoenix American Hospitality and its president in the same Dallas court, No. 3:26-cv-01846. The REITs themselves were not defendants in that case. According to the SEC’s complaint:- From March 2022 through July 2024, the two REITs raised about $86 million from more than 2,000 retail investors: about $56.6 million for REIT I and about $29.4 million for REIT II, which began raising money in the fall of 2023.
- Investors were allegedly told REIT I owned as many as 11 hotels, when its only hotel investment until January 2024 was a $1.5 million preferred equity interest in a single hotel.
- Distributions of up to 12% a year were allegedly described as coming from operating profits, when, according to the SEC, neither REIT was profitable and the distributions were funded mainly with investors’ own money.
Both defendants agreed to settle the SEC case without admitting or denying the allegations. According to the SEC’s litigation release, the consent judgments include permanent injunctions, civil penalties of $591,127 for Phoenix American Hospitality and $118,225 for its president, and a five-year officer-and-director bar for the president, subject to court approval. The private complaint’s specific allegations have not been made public, so it is not known how closely they track the SEC’s.
Why the Class Period Ends in July 2024
In a report filed with the SEC in July 2024, REIT II disclosed that Phoenix American Hospitality had received an SEC subpoena on June 21, 2024, and that effective July 15, 2024 the company had paused distributions and stopped taking new investments. The shares were sold under Regulation A, an exemption used for smaller public offerings, and were not listed on a stock exchange, so there is no market share price for the period.The REITs Filed for Bankruptcy in October 2026
According to REIT I’s October 2026 report to the SEC, American Hospitality Properties REIT, Inc. and certain subsidiaries filed voluntary Chapter 11 petitions on October 4, 2026 in the U.S. Bankruptcy Court for the Northern District of Texas. The cases are jointly administered as In re American Hospitality Properties REIT, Inc., No. 26-80071, and REIT II is also a debtor. Phoenix American Hospitality, which stopped managing the REITs in May 2026, did not file.A bankruptcy filing generally triggers an automatic stay that pauses lawsuits against the companies that filed. No order addressing how the bankruptcy affects the class action’s claims against the two REITs had been made public as of November 13, 2026.
What Happens Next?
Under the Private Securities Litigation Reform Act, the court appoints a lead plaintiff to direct the case for the proposed class, and class members may ask for that role within 60 days after notice of the lawsuit is published. Notices about this case give November 16, 2026 as that deadline. After a lead plaintiff and lead counsel are appointed, the lead plaintiff typically files an amended complaint, and the defendants can ask the court to dismiss it. Investors do not have to seek appointment as lead plaintiff to remain members of the proposed class. Nothing can be claimed unless the case settles or ends in a judgment for the class.Questions
Can investors file a claim for money in the Phoenix American Hospitality case?
There is nothing to claim. The case is at the complaint stage: no class has been certified, no settlement has been reached and no court has found that any defendant did anything wrong. A claim process would exist only if the case settled or ended in a judgment for the class.
Who is covered by the proposed class?
According to the plaintiff’s announcement, the proposed class is people who bought common stock of American Hospitality Properties REIT, Inc. or American Hospitality Properties REIT II, Inc. between March 1, 2022 and July 31, 2024. Those shares were sold to retail investors in Regulation A offerings and did not trade on a stock exchange.
What is the November 16, 2026 deadline?
It is the deadline, published in notices about the case, for class members to ask the court to appoint them lead plaintiff under the Private Securities Litigation Reform Act. The lead plaintiff directs the case for the class. Investors do not have to seek that role to remain members of the proposed class.
How does the SEC case relate to the class action?
In June 2026 the SEC sued Phoenix American Hospitality and its president, alleging they misled investors in the two REITs about hotel holdings and the source of distributions. Both settled without admitting or denying the allegations. The class action was filed in the same Dallas federal court in September 2026 and covers the same March 2022 to July 2024 period.
What does the REITs’ Chapter 11 filing mean for the lawsuit?
American Hospitality Properties REIT, Inc., REIT II and related entities filed for Chapter 11 on October 4, 2026. A bankruptcy filing generally pauses lawsuits against the companies that filed. Phoenix American Hospitality itself did not file. No order addressing how the bankruptcy affects the class action had been made public as of November 13, 2026.
Sources
- U.S. District Court for the Northern District of Texas, Proven Business Skills Inc. v. Phoenix American Hospitality LLC, No. 3:26-cv-03130 (docket)
- SEC complaint, SEC v. Phoenix American Hospitality, LLC, No. 3:26-cv-01846 (N.D. Tex., filed June 4, 2026)
- SEC Litigation Release No. 26560 (June 5, 2026)
- American Hospitality Properties REIT II, Form 1-U (July 2024)
- American Hospitality Properties REIT, Form 1-U (October 2026)
