Levi & Korsinsky Reminds Shareholders of a Lead Plaintiff Deadline of July 6, 2026 in FS KKR CAPITAL CORP. Lawsuit - FSK
Important Notice Regarding Alleged Portfolio Valuation Misrepresentations That Cost FS KKR Capital Investors Nearly $880 Million in Fair Value Losses
NEW YORK, June 01, 2026 (GLOBE NEWSWIRE) -- Levi & Korsinsky, LLP notifies investors in FS KKR Capital Corp. (NYSE: FSK) that a class action lawsuit has been filed on behalf of shareholders who purchased securities between May 8, 2024 and February 25, 2026. Find out if you qualify to recover losses. You may also contact Joseph E. Levi, Esq. at jlevi@levikorsinsky.com or (212) 363-7500.
The combined fair value decline across Q2 and Q4 2025 totaled approximately $880 million. FSK shares fell $2.03 per share, or 15.24%, on February 26, 2026, following the final corrective disclosure.
The private credit market has attracted billions in institutional capital from investors seeking stable income through Business Development Companies. FS KKR Capital Corp. (NYSE: FSK) reported $14.2 billion in total investment fair value at the start of the Class Period, but the portfolio's reported health allegedly masked a deepening credit deterioration that would ultimately erase $880 million in fair value across just two quarters.
How Inflated Portfolio Valuations Allegedly Harmed Shareholders
A BDC's net asset value is the single most important metric investors use to assess portfolio health. The lawsuit alleges that throughout the Class Period, FS KKR Capital overstated the fair value of its investment portfolio while claiming its valuation process was operating effectively. According to the lawsuit, the Company represented quarter after quarter that its board oversaw a rigorous fair valuation process under Rule 2a-5 of the 1940 Act, while portfolio companies were deteriorating beneath reported figures.
The complaint contends the Company's NAV declined from $24.32 per share in March 2024 to $20.89 by December 2025, a cumulative erosion of $3.43 per share, or 14.1%, that accelerated sharply once the true condition of legacy investments was revealed.
Key Portfolio Valuation Allegations for Shareholders
- The Company allegedly overstated the effectiveness of its fair value determination process while non-accrual investments were building beneath reported figures
- Total fair value of investments fell $474 million in Q2 2025 and another $406 million in Q4 2025
- The Company's Chief Investment Officer was forced to acknowledge the non-accrual rate exceeded the BDC industry average only after cumulative losses had already materialized
The Alleged Valuation Methodology Failure
The lawsuit asserts that FS KKR Capital's SEC filings described a valuation framework relying on dealer quotes, portfolio company financials, comparable public company analysis, and independent third-party pricing services. The action claims these representations gave investors false confidence in reported NAV figures while the underlying portfolio was experiencing accelerating credit stress that the disclosed valuation procedures should have captured earlier.
The Company's own risk factor disclosures acknowledged that fair value determinations "may cause our net asset value on a given date to materially understate or overstate the value," yet the lawsuit contends management simultaneously certified that disclosure controls and internal controls over financial reporting were effective each quarter.
"This case presents important questions about portfolio valuation disclosure obligations in the private credit sector. When a BDC reports declining non-accrual rates for five consecutive quarters and then reverses course dramatically, investors deserve to understand whether reported valuations reflected the true condition of the underlying portfolio." -- Joseph E. Levi, Esq.
Submit your information to join this case or call Joseph E. Levi, Esq. at (212) 363-7500.
ABOUT LEVI & KORSINSKY, LLP -- Over the past 20 years, Levi & Korsinsky has secured hundreds of millions of dollars for aggrieved shareholders. The firm has extensive expertise in complex securities litigation and a team of over 70 employees. For seven consecutive years, Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report. Applications to serve as lead plaintiff must be filed by July 6, 2026.
Frequently Asked Questions About the FSK Lawsuit
Q: What is the FSK class action lawsuit about? A: A securities class action has been filed against FS KKR Capital Corp. (NYSE: FSK) alleging materially false and misleading statements between May 8, 2024 and February 25, 2026. Shares fell approximately 15.24% after the truth was revealed on February 26, 2026, causing significant losses for shareholders.
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 do FSK investors need to do right now? A: Gather brokerage records including purchase dates, share quantities, and prices paid. Contact Levi & Korsinsky for a free, no-obligation evaluation at jlevi@levikorsinsky.com or (212) 363-7500. No immediate action is required to remain eligible as a class member.
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 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 missed the lead plaintiff deadline? A: The deadline applies only to investors seeking lead plaintiff appointment. Class members who miss it can still participate in any settlement or recovery.
CONTACT:
Levi & Korsinsky, LLP
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
jlevi@levikorsinsky.com
Tel: (212) 363-7500
Fax: (212) 363-7171
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