Blackrock TCP Capital Faces Investor Lawsuit Over Portfolio Valuation

A significant decline in the net asset value (NAV) of Blackrock TCP Capital Corp. has triggered a wave of legal action, with multiple U.S. law firms now soliciting investors to join a class action. Firms including Rosen Law Firm are building a case centered on allegations that the business development company (BDC) issued misleading statements regarding its portfolio valuations and the effectiveness of its restructuring strategies.

Key Data Points:
* Previous Closing Share Price: $4.86
* Estimated Q4 2025 NAV Per Share: $7.05 ? $7.09
* Class Action Period: November 6, 2024, to January 23, 2026
* Lead Plaintiff Deadline: April 6, 2026

The immediate catalyst for the legal and market turmoil was a company announcement on January 23. Blackrock TCP Capital released preliminary figures for the fourth quarter of 2025, revealing a steep drop in its net asset value. The estimated NAV of $7.05 to $7.09 per share represented a decline of approximately 19% from the prior quarter and more than 23% year-over-year.

Market reaction was swift and severe. Upon the release of this data, the company's equity lost nearly 13% of its value in a single trading session, with the downward pressure continuing into February. Management attributed the majority of the NAV contraction to adverse developments at six specific portfolio companies, which were collectively responsible for about two-thirds of the total decrease.

Core Allegations: Misrepresentation and Optimism

The formal class action allegations focus on the period from November 2024 through January 2026. Plaintiffs contend that during this time, the BDC's management presented an overly optimistic picture of its turnaround efforts and the underlying health of its investment portfolio. The subsequent NAV correction, they argue, exposed these earlier statements as materially misleading.

Should investors sell immediately? Or is it worth buying Blackrock TCP Capital?

Further compounding the issue was a deterioration in credit quality within the portfolio. The level of "non-accruals"?loans where interest payments are no longer being received?rose to roughly 4.0% of the portfolio at fair value, equivalent to 9.6% at cost. This increase highlights growing operational difficulties among certain holdings.

Investors who suffered losses during the class period face a firm deadline. The cutoff to apply as a lead plaintiff in the ongoing lawsuit is April 6, 2026. The response by that date will indicate the scale of shareholder participation in the legal challenge, as markets monitor the company's progress in stabilizing its portfolio performance.

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