Securities & Exchange Commission v. Platinum Management (NY) LLC, et al.

Key Documents

• The Receiver’s Thirteenth Status Report to the Court
• The Receiver’s Twelfth Status Report to the Court
• The Receiver’s Eleventh Status Report to the Court
• The Receiver’s Tenth Status Report to the Court
• The Receiver’s Ninth Status Report to the Court
• The Receiver’s Eighth Status Report to the Court
• The Receiver’s Seventh Status Report to the Court
• The Receiver’s Sixth Status Report to the Court
• Order Granting the Receiver’s Motion for Entry of an Order (A) Approving Settlement Agreements with (1) CNO Financial Group, Inc. and Related Parties, and (2) Senior Health Insurance Company of Pennsylvania and Fuzion Analytics, Inc., and (B) Approving Use of Funds
• Notice of Proposed Sale of LC Energy and Establishment of LC Energy Claims Bar Date In Connection Therewith
• Order Authorizing the Receiver to Sell the Receivership’s Rights in LC Energy and Establishing LC Energy Claims Bar Date
• Complaint dated December 19, 2018
• The Receiver’s Fifth Status Report to the Court
• The Receiver's Fourth Status Report to the Court
• The Receiver’s Third Status Report to the Court
• The Receiver’s Corrected Second Status Report to the Court
• The Receiver’s Second Status Report to the Court
• Order Approving Expansion of Receivership

  On December 29, 2017, the Court entered an Order [Dkt. No. 297] approving the Receiver’s request to expand the receivership estate to include the following additional entities: (i) Platinum Partners Liquid Opportunity Master Fund L.P., (ii) Platinum Partners Credit Opportunities Fund International Ltd, and (iii) Platinum Partners Credit Opportunities Fund International (A) Ltd. These entities are now under the control of the Receiver and the supervision of the Court in accordance with the provisions of the Second Amended Order Appointing Receiver.

• The Receiver’s First Status Report to the Court
• Order Reassigning Case.

  Case reassigned to Judge Brian M. Cogan for all further proceedings. Chief Judge Dora Lizette Irizarry is no longer assigned to the case.

• Second Amended Order Appointing Receiver
• Order Adopting Protocols for Parties in Interest to Be Heard on Receiver Motions
• The Receiver’s Initial Status Report to the Court
• Order Approving Retention of Goldin Associates LLC
• Order Approving Retention of Otterbourg P.C.
• Facsimile Letter from Melanie L. Cyganowski to Judge Irizarry Regarding the Proposed Order Appointing Receiver
• Declaration of Neal Jacobson Pursuant to Local Rule 6.1(d) in Support of Application for an Order to Show Cause
• Declaration of Melanie L. Cyganowski dated June 26, 2017
• Securities and Exchange Commission’s Memorandum in Support of Its Application for an Order to Show Cause for Entry of a Second Amended Order Appointing Receiver and Appointment of a Substitute Receiver
• Securities and Exchange Commission’s Application for an Order to Show Cause for Entry of a Second Amended Order Appointing Receiver and Appointment of a Substitute Receiver
• The Receiver’s First Quarterly Status Report for the Period December 19, 2016 through March 31, 2017
• Order Appointing Receiver Schwartz
• Exhibits to the Complaint December 19, 2016
• Complaint dated December 19, 2016

Beechwood Litigation

To access the Beechwood Litigation Case Docket, please click below:

• 18-06658 In re Platinum-Beechwood Litigation
• 18-10936 Trott et al v. Platinum Management (NY) et al
• 18-12018 Cyganowski, et al v. Beechwood Re LTD. et al

On March 29, 2019, Melanie L. Cyganowski, the Court appointed receiver for certain funds commonly referred to as Platinum Partners (the “PPCO Funds”), through her counsel Otterbourg P.C., filed an amended complaint in the United States District Court for the Southern District of New York against, among others, (i) certain so-called Beechwood entities, (ii) Senior Health Insurance Company of Pennsylvania, (iii) Fuzion Analytics, Inc., (iv) CNO Financial Group, Inc., (v) Bankers Conseco Life Insurance Company, (vi) Washington National Insurance Company and (vii) 40|86 Advisors, Inc. Click here to read the amended redacted complaint in the action captioned “Melanie L. Cyganowski, as Equity Receiver for Platinum Partners Credit Opportunities Master Fund LP, et al. v. Beechwood RE Ltd., et al.” now pending as Case 1:18-cv-12018 in the United States District Court for the Southern District of New York. As is fairly standard in similar cases, the Receiver exercised her right under the applicable rules and orders of the court to amend the originally filed complaint.

The Receiver’s amended complaint seeks redress for the innocent investors and creditors of her estate damaged by the defendants’ unlawful and tortious acts. The Receiver alleges that through their creation of Beechwood, a purported independent reinsurance entity, the Platinum insiders expanded a pre-existing fraud that personally enriched them through the generation of millions of dollars in management fees, incentive fees, false profits and other remuneration over the years.

Certain of the defendants named in the Receiver’s amended complaint are alleged to have substantially assisted, and participated with, Beechwood and the Platinum insiders to commit fraud and breach their fiduciary duties to the PPCO Funds. Specifically, these defendants – acting through Beechwood – structured and implemented a series of transactions that ultimately saddled the PPCO Funds with approximately $69.1 million of debt owing to Beechwood, as agent for the insurers, secured by liens on substantially all of the PPCO Funds’ assets, including those of nearly all of their portfolio companies, in consideration for assets that were worth a fraction of that amount.

For these reasons, the Receiver asserts causes of action for, among other things, (i) violations of the Racketeer Influenced and Corrupt Organizations Act and/ or federal securities fraud; (ii) aiding and abetting common law fraud; (iii) aiding and abetting breach of fiduciary duty; (iv) actual and constructive fraudulent conveyances; and (v) unjust enrichment. In addition to monetary damages, the Receiver seeks to avoid the first-priority liens asserted against PPCO Funds’ assets by certain defendants which may otherwise adversely impact potential distributions to investors and creditors.

The Receiver will update her website, http://www.platinumreceivership.com/index, with developments in the case and will address investor/ creditor inquiries regarding the suit at her next Town Hall meeting, the date and time of which have not yet been scheduled but which will be announced on the Receiver’s website. Any questions or concerns in the interim should be submitted via email to platinumreceiver@otterbourg.com.

Protocols for Parties in Interest to Be Heard on Receiver Motions

• Order Adopting Protocols for Parties in Interest to Be Heard on Receiver Motions

Case Information

Bar Date

The Court has established the following dates by which claims by non-investor creditors against the Receivership Entities must be filed:

(i) 5:00 p.m. (prevailing Eastern Time) on March 29, 2019 as the deadline for Claimants other than Governmental Units to submit Proofs of Claim against the Receivership Entities; and

(ii) 5:00 p.m. (prevailing Eastern Time) on April 12, 2019 as the deadline for Governmental Units to submit Proofs of Claim against the Receivership Entities.

The Bar Date Order can be viewed here.

The Proof of Claim Form, which includes instructions for filing a claim, can be downloaded here.

The Notice of the Bar Date can be viewed here.

DEADLINE for filing a claim against LC ENERGY only: March 4, 2019 at 5:00pm (ET). For additional information on how to file a claim, see Notice of Proposed Sale of LC Energy and Establishment of LC Energy Claims Bar Date In Connection Therewith and Order Authorizing the Receiver to Sell the Receivership’s Rights in LC Energy and Establishing LC Energy Claims Bar Date in Key Documents section for more information.