FS KKR Capital Promised Shareholders a Minimum $2.90 Per Share in Annual Distributions and Quarterly Stability; Instead, Investors Received a 31% Dividend Cut
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NEW YORK, May 13, 2026 — Levi & Korsinsky, LLP highlights the contrast between FS KKR Capital Corp.’s (NYSE: FSK) promises to shareholders and the results that followed. Find out if you qualify to recover losses. You may also contact Joseph E. Levi, Esq. at jlevi@levikorsinsky.com 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 slashed its quarterly distribution to $0.48 from $0.70 and revealed that net asset value had deteriorated to $20.89 per share. The lead plaintiff deadline is July 6, 2026.
The Promise
Across five consecutive quarters beginning May 8, 2024, management told investors the Company was delivering on a clear commitment: reliable, attractive distributions backed by a strengthening portfolio. The action claims management made the following representations:
● A minimum of $2.90 per share in total distributions during 2024
● Base quarterly distributions of $0.64 plus $0.06 supplemental
● “Significant progress restructuring certain non-accruing investments”
● “Portfolio stability” and “continued stability of distributions” even amid market volatility
● Non-accrual investments were being “further reduced” each quarter
The Reality
The lawsuit contends that the Company’s portfolio was deteriorating beneath those assurances. What shareholders actually received stood in stark opposition to what they were promised:
|
Category |
Promised / Stated |
Alleged Actual Outcome |
|
Quarterly Distribution |
$0.70 per share |
Cut to $0.48 per share (31% reduction) |
|
NAV Trajectory |
“Portfolio stability” |
Declined from $24.46 to $20.89 (loss of $3.57/share) |
|
Non-Accrual Trend |
“Further reduced” each quarter |
Rose to 5.5% at cost, exceeding BDC industry average of 3.8% |
|
Fair Value of Investments |
Stable portfolio implied |
Fell $474 million in Q2 2025, then another $406 million in Q4 2025 |
|
Earnings Per Share |
Positive investment income |
Net realized and unrealized loss of negative $1.36/share (Q2 2025) and negative $0.89/share (Q4 2025) |
The Numbers: What the Gap Cost Investors
The filing states that the gap between promise and reality inflicted measurable financial harm. Total fair value of investments fell by approximately $880 million across the two corrective disclosure periods. The Company’s own Chief Investment Officer acknowledged that the non-accrual rate had exceeded the long-term BDC industry average, and that the identified troubled companies accounted for only “50% of net realized and unrealized losses,” meaning the damage extended well beyond what management had previously disclosed.
Calculate your potential recovery or call (212) 363-7500.
“Companies that make specific promises to investors about future performance have an obligation to disclose known risks to those projections. When the gap between what shareholders are told and what the company actually experiences becomes this wide, the securities laws provide a mechanism for accountability.” — Joseph E. Levi, Esq.
What the Lawsuit Alleges About the Gap
As pleaded, the securities action contends that management knew or should have known that its distribution commitments and restructuring claims lacked a reasonable basis. The complaint charges that Defendants overstated the effectiveness of portfolio restructuring, overstated portfolio valuations, and overstated the durability of the distribution strategy throughout the Class Period of May 8, 2024 through February 25, 2026.
Join the FSK recovery action or contact Joseph E. Levi, Esq. at (212) 363-7500.
ABOUT LEVI & KORSINSKY, LLP — Levi & Korsinsky, LLP is a nationally recognized shareholder rights firm. Over the past 20 years, the firm has secured hundreds of millions of dollars for aggrieved shareholders. Ranked in ISS Top 50 for seven consecutive years.
Frequently Asked Questions About the FSK Lawsuit
Q: What specific misstatements does the FSK lawsuit allege? A: The complaint alleges FS KKR Capital made materially false or misleading statements regarding the effectiveness of its portfolio restructuring efforts, the accuracy of its portfolio valuations, and the sustainability of its quarterly distribution strategy during the Class Period of May 8, 2024 through February 25, 2026. When the true state was revealed through corrective disclosures, the stock price declined sharply.
Q: How much did FSK stock drop? A: Shares fell approximately 15.24%, a decline of $2.03 per share, after the Company disclosed its Q4 2025 earnings, cut its dividend by 31%, and revealed that non-accrual rates had exceeded the BDC industry average. An earlier corrective disclosure on August 6, 2025 also caused an 8.20% decline.
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 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: 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
Tel: (212) 363-7500
Fax: (212) 363-7171