PR Newswire
Notice to Pension Funds, Asset Managers, and Fiduciaries: FS KKR Capital Corp. Portfolio Losses Totaling $880 Million Across Two Corrective Disclosures May Trigger Fiduciary Review Obligations for Institutional Holders
NEW YORK, May 27, 2026 /PRNewswire/ — Institutional investors holding positions in FS KKR Capital Corp. (NYSE: FSK) during the period May 8, 2024 through February 25, 2026 may wish to evaluate lead plaintiff opportunities in the pending securities class action. Request an institutional investor loss assessment. You may also contact Joseph E. Levi, Esq. at [email protected] or (212) 363-7500.
FSK shares fell $2.03 per share, or 15.24%, closing at $11.29 on February 26, 2026, after the Company cut its quarterly dividend from $0.70 to $0.48 and disclosed that non-accrual investments had risen above the long-term BDC industry average. Combined fair value declines across Q2 and Q4 2025 totaled approximately $880 million.
Notice to Institutional Holders
Pension funds, endowments, mutual funds, and other fiduciaries that acquired FSK shares during the Class Period face distinct considerations. Under ERISA and analogous state fiduciary standards, investment managers who held FSK in client portfolios may need to assess whether continued retention of the position, failure to monitor corrective disclosures, or inaction regarding lead plaintiff appointment could raise fiduciary questions.
Institutional holders with the largest documented losses are frequently best positioned to serve as lead plaintiff, giving them direct oversight of litigation strategy, settlement negotiations, and counsel selection.
Fiduciary Obligations and Recovery Options
The lawsuit asserts that FS KKR Capital and certain officers made materially misleading statements about portfolio health, restructuring progress, and distribution sustainability throughout the Class Period. Institutional investors should consider:
- FSK’s net asset value declined from $24.32 per share (Q1 2024) to $20.89 per share (Q4 2025), a cumulative erosion of $3.43 per share, or 14.1%, across the period
- Total fair value of investments fell $474 million in Q2 2025 and an additional $406 million in Q4 2025
- The Company’s dividend was cut by 31.4%, from $0.70 to $0.48 per share, directly affecting income-dependent institutional portfolios
- Lead plaintiff appointment carries no additional cost and provides governance authority over case strategy
Contact us for institutional recovery options or call (212) 363-7500.
Portfolio Impact Assessment
BDC allocations are frequently held within income-focused mandates where distribution stability is a core selection criterion. The complaint contends that management repeatedly assured shareholders that distributions were sustainable and backed by spillover income, even as the underlying portfolio deteriorated. For fiduciaries who selected or retained FSK based on these representations, the corrective disclosures may have caused losses that warrant formal review under applicable fiduciary standards.
“Institutional investors play a critical role in securities class actions. Their participation as lead plaintiff ensures the class benefits from experienced oversight and meaningful accountability,” stated Joseph E. Levi, Esq.
Case Summary
The action alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. The Class Period runs from May 8, 2024 through February 25, 2026. The Court has set July 6, 2026 as the deadline to apply for lead plaintiff appointment.
INSTITUTIONAL INVESTOR REPRESENTATION Levi & Korsinsky, LLP provides sophisticated counsel to institutional investors evaluating lead plaintiff opportunities. The firm has recovered hundreds of millions of dollars. Ranked among ISS Top 50 for seven consecutive years.
Frequently Asked Questions About the FSK Lawsuit
Q: Who is eligible to join the FSK investor lawsuit? A: Investors who purchased FSK stock or securities between May 8, 2024 and February 25, 2026 and suffered financial losses may be eligible. Eligibility is based on purchase date and documented losses, not on whether you still hold the shares.
Q: What is the FSK lead plaintiff deadline? A: The deadline to apply for lead plaintiff appointment is July 6, 2026. This deadline applies only to investors seeking to serve as lead plaintiff. Class members who do not apply may still participate in any recovery without taking action before this date.
Q: What is a lead plaintiff and why does it matter? A: A lead plaintiff is the investor appointed by the court to represent the entire class. Lead plaintiffs are typically investors with the largest documented losses. Being appointed does not increase individual recovery but gives direct oversight of how the case is run.
Q: How do I know if I lost enough money to be the lead plaintiff? A: There is no minimum loss threshold. Courts appoint the investor with the largest provable loss who is willing and able to represent the class adequately. Contact Levi & Korsinsky before July 6, 2026 to evaluate.
Q: What does it cost me to participate? A: Nothing. Securities class actions are handled on a pure contingency basis. No upfront fees, no retainer, no out-of-pocket costs.
Q: What if I already sold my FSK shares, can I still recover losses? A: Yes. Eligibility is based on when you purchased, not whether you still hold them. Investors who bought during the class period and sold at a loss may still participate.
Q: What if I live outside the United States? A: U.S. securities class actions generally cover purchases on U.S. exchanges regardless of investor’s country of residence.
CONTACT:
Levi & Korsinsky, LLP
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
[email protected]
Tel: (212) 363-7500
Fax: (212) 363-7171
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SOURCE Levi & Korsinsky, LLP
