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

Platinum Receivership


MELANIE L. CYGANOWSKI, RECEIVER c/o Otterbourg P.C. 230 Park Avenue, 30th Floor New York, NY 10169 E-mail: platinumreceiver@otterbourg.com Website: www.PlatinumReceivership.com

December 11, 2017

VIA WEB POSTING

TO:
FROM:
RE:
Platinum Partners Investors and Creditors
Melanie L. Cyganowski, as Receiver
Investor & Creditor Forum

I am pleased to announce that I will hold a virtual forum for Platinum Partners Investors and Creditors on December 20, 2017 from 12:00 P.M. to 1:00 P.M. Eastern. During the forum, I plan to provide an update on the Receivership, including the steps I have taken since my appointment, and our plans moving forward. There will also be time for questions.

Instructions for registering and participating in the forum by computer or telephone are provided below. If you would like to submit questions in advance, or have any questions regarding the forum, please direct them to platinumreceiver@otterbourg.com. Those participating by computer will be able to submit questions during the event using the computer service, but those participating by phone will be on mute and will need to send questions through the platinumreceiver@otterbourg.com email address. Finally, please note that we will utilize a court reporter, as well as video, to record the session.

Thank you and I look forward to speaking with you soon.

Sincerely,

Melanie L. Cyganowski
Receiver

You are invited to a Platinum Receivership webinar.
When: Dec 20, 2017 12:00 PM (Eastern Time - US and Canada)

Topic: Investor & Creditor Forum

BY COMPUTER:

Click the link below to join the webinar -
https://zoom.us/j/662701274

Please note: You must first download “Zoom” webinar software. Simply google “zoom.us” to download this free software.

BY TELEPHONE:

Dialing in from the United States: +1 646 876 9923 -OR- +1 669 900 6833 -OR- +1 408 638 0968

International numbers available: https://zoom.us/zoomconference?m=NkXv8xc09RefTkPQp8CvVZRxbcdOB6_O

Webinar ID: 662 701 274
Participant CODE: # (no number necessary, just the “#” sign)




November 20, 2017

VIA WEB POSTING

Re:
Securities & Exchange Commission v. Platinum Management (NY) LLC, et al.
United States District Court for the Eastern District of New York
Case No.: 1:16-cv-06848-BMC-VMS

Dear Investors:

I am writing to you as the Receiver of Platinum Credit Management, L.P.; Platinum Partners Credit Opportunities Master Fund LP; Platinum Partners Credit Opportunities Fund (TE) LLC; Platinum Partners Credit Opportunities Fund LLC; Platinum Partners Credit Opportunity Fund (BL) LLC; Platinum Liquid Opportunity Management (NY) LLC; and Platinum Partners Liquid Opportunity Fund (USA) L.P. (collectively, the “Receivership Entities” or “Platinum”). As you know, as Receiver, I am charged with, among other things, (i) taking control of and managing Platinum’s property and records (the “Receivership Assets”), (ii) taking actions as necessary and appropriate to preserve Receivership property, and (iii) taking actions as necessary and appropriate for the orderly liquidation of the Receivership Assets. The purpose of this letter is to provide an update on certain key developments since my last letter to you, dated August 17, 2017.

Recently, the Court entered several significant orders, all of which can be viewed on the receivership website (www.platinumreceivership.com):

As mentioned, one of my most important responsibilities is to oversee the monetization of Platinum’s investment portfolio. The assets of the Receivership Entities are diverse, but generally fall into three main asset categories: (i) life settlement investments (e.g., investments in life insurance policies), (ii) litigation finance investments, and (iii) “other” assets, which are primarily concentrated in the metals and mining and energy sectors, in companies that are mostly in the developmental stages.

My team and I have made significant progress in liquidating these assets. Through the latest reporting period ending September 30, 2017, I have sold investment portfolio positions that have brought over $11 million into the Receivership Estate. The approximately $11 million is comprised of the following: (i) Katrina Barge Litigation Joint Venture, LLC (litigation finance investment) - $5.6 million, (ii) Milberg LLP (litigation finance investment) - $2.2 million, (iii) Martin Kenney & Co. (litigation finance investment) - $1.8 million, (iv) Blumont (stock sale) - $1.2 million, (v) Grey K (environmental-related investment) - $136,000.00, and (vi) Bang Holdings Corp. (social media investment) - $50,000.00. None of these assets has been liquidated in a “fire sale” fashion. Indeed, to the contrary, one of these investments was monetized at par value.

There are several other investments on the verge of disposition. I have retained Houlihan Lokey Capital, Inc. (“Houlihan Lokey”) to market and sell specific assets including the life settlements portfolio, the litigation finance portfolio, and certain other natural resource investments (including the Brazilian gold tailings mine). I am hopeful that the life settlements portfolio and certain of the litigation finance investments, as to which marketing has begun, is expected to be sold in the first quarter 2018. In addition, I have retained Conway MacKenzie to perform due diligence on and potentially market and sell assets in Platinum’s portfolio that Houlihan Lokey has not been tasked with monetizing. There will be no duplication in the work as between Houlihan Lokey and Conway MacKenzie.

I also negotiated a payoff at a considerable reduction of Platinum’s secured debt. The secured loan provided by Heartland Bank to Platinum Partners Credit Opportunities Master Fund LP was to come due at the end of August, at which time, if not paid in full, interest at the default rate would continue to accrue. For these reasons, I negotiated a settlement with Heartland Bank for the payoff of the loan at a reduced amount, achieving savings of over $1,000,000 in principal and $200,000 in interest.

I will report on our continuing efforts to monetize Receivership Assets by filing periodic reports with the Court. These reports will also be posted to this website. I anticipate filing my First Status Report to the Court no later than November 30, 2017.

As previously reported, Deloitte Tax LLP has been engaged to prepare tax returns, including K-1s, for the Receivership Entities. This has proven to be a complex engagement which has taken longer than anticipated. Some of the K-1s will begin to be issued shortly. Others will follow in the next several weeks.

As a reminder, you can send general email inquiries to platinumreceiver@otterbourg.com. Although we monitor and review all emails, it is not practical for us to respond personally to all messages. We will try to update the Frequently Asked Questions (“FAQ”) section on this website as needed to reflect your inquiries and our responses.

Thank you in advance for your cooperation and understanding.

Sincerely,

Melanie L. Cyganowski
Receiver

MELANIE L. CYGANOWSKI, RECEIVER c/o Otterbourg P.C. 230 Park Avenue, 30th Floor New York, NY 10169 E-mail: platinumreceiver@otterbourg.com Website: www.PlatinumReceivership.com

August 17, 2017

VIA WEB POSTING

Re:
Securities & Exchange Commission v. Platinum Management (NY) LLC, et al.
United States District Court for the Eastern District of New York
Case No.: 1:16-cv-06848-BMC-VMS

Dear Investors:

I am writing to you as the newly-appointed receiver of Platinum Credit Management, L.P.; Platinum Partners Credit Opportunities Master Fund LP; Platinum Partners Credit Opportunities Fund (TE) LLC; Platinum Partners Credit Opportunities Fund LLC; Platinum Partners Credit Opportunity Fund (BL) LLC; Platinum Liquid Opportunity Management (NY) LLC; and Platinum Partners Liquid Opportunity Fund (USA) L.P. (collectively, the “Receivership Entities” or “Platinum”) (collectively, “Platinum”). As Receiver, I am charged with, among other things, (i) taking control of and managing Platinum’s property and records (the “Receivership Assets”), (ii) taking actions as necessary and appropriate to preserve Receivership property, and (iii) taking actions as necessary and appropriate for the orderly liquidation of the Receivership Assets. The purpose of this letter is to advise you of the initial progress since my appointment and to explain how I intend to respond to your inquiries.

On June 23, 2017, the prior receiver, Bart M. Schwartz, resigned. As a result, by Order dated July 6, 2017, the Court appointed me as Receiver for the Receivership Entities. On July 21, 2017, the Court approved the retention of Otterbourg, P.C. as my legal counsel and Goldin Associates LLC as my financial advisor (collectively, the “Receivership Team”). Unless specifically modified, all previous court orders remain in place. A Second Amended Order Appointing Receiver, which sets forth the rights and responsibilities of the Receiver is expected to be entered in the near term. All documents, including a copy of the original Complaint for Injunctive and Other Relief against Platinum and its principals, Mark Nordlicht, David Levy, Daniel Small, Uri Landesman, Joseph Mann, Joseph Sanfilippo, and Jeffrey Shulse, filed by the Securities & Exchange Commission (“SEC”), Temporary Restraining Order, and Order Appointing Receiver can be viewed on this website.

Upon my appointment, the Receivership Team took immediate steps to secure and take control over Platinum’s accounts and books and records and implement cash management procedures. I also implemented procedures for the review and approval of all expenditures. The Receivership Team has prepared a 13-Week Cash Receipts and Disbursements Forecast, performed weekly actual vs. forecasted variance analyses, and is conducting daily and weekly reconciliations of Platinum’s cash and brokerage accounts.

The opening investment portfolio consisted of 90 investments in 69 entities. The assets of the Receivership Entities are diverse, but generally fall into three main asset categories: (i) life settlement investments (e.g., investments in life insurance policies), (ii) litigation finance investments, and (iii) “other” assets, which are primarily concentrated in the metals and mining and energy sectors, in companies that are mostly in the developmental stages. The nature of the Receivership Entities’ investments in the “other” assets varies. The Receivership Team is undertaking a thorough financial and legal analysis of the Receivership Entities’ position(s) in each investment, the rights of the Receivership Entity in the capital structure and pursuant to the operative documents, assessing the maintenance costs of the asset, and options available to the Receiver with respect to the monetization of the investment.

During the short time that I have been in control of the Receivership Assets, certain investments totaling approximately $8.6 million have been liquidated or are on the verge of liquidation. None of these assets has been liquidated in “fire sale” fashion. Indeed, one of them was monetized at par value. I believe that the life settlement and certain of the litigation finance investments are liquid and that there may be additional funds realized from their liquidation in the next several months.

As a general matter, however, I have not found support for the values reflected on Platinum’s books or for certain early indications of value in the Receivership. I look forward to working with Houlihan Lokey Financial Advisors, Inc., which I have retained to provide valuation services, and developing supportable valuation assessments.

I will report on our efforts by filing periodic reports with the Court. The reports will also be posted to this website set forth above. The most recent report: My Initial Status Report to the Court, which was filed on August 10, 2017, provides a more detailed review of the actions taken since my appointment and can be found on this website.

You can send general email inquiries to platinumreceiver@otterbourg.com. Although my staff and I will review all emails we receive, it is not practical for us to respond personally to all messages, not least because it would consume a significant amount of time. Accordingly, we will update the Frequently Asked Questions (“FAQ”) section on this website as needed to reflect your inquiries and our responses.

Thank you in advance for your cooperation and understanding.

Sincerely,

Melanie L. Cyganowski
Receiver

Key Documents

Learn more about the Settlement by downloading the documents below.

Protocols for Parties in Interest to Be Heard on Receiver Motions

Case Information

RECEIVERSHIP ENTITIES
Platinum Credit Management, L.P.
Platinum Partners Credit Opportunities Master Fund LP
Platinum Partners Credit Opportunities Fund (TE) LLC
Platinum Partners Credit Opportunities Fund LLC
Platinum Partners Credit Opportunity Fund (BL) LLC
Platinum Liquid Opportunity Management (NY) LLC
Platinum Partners Liquid Opportunity Fund (USA) L.P.

CASE NUMBER
1:16-cv-6848 (BMC)(VMS)

COURT
United States District Court for the Eastern District of New York

JUDGE
Judge Brian M. Cogan

DATE FILED
December 19, 2016

LEGAL COUNSEL TO RECEIVER
Otterbourg P.C.
230 Park Avenue
New York, NY 10169
Phone: 212-661-9100
Fax: 212-682-6104
Attention: Adam C. Silverstein
Erik B. Weinick

FINANCIAL ADVISOR TO RECEIVER
Goldin Associates LLC
350 Fifth Avenue
The Empire State Building
New York, NY 10118
Phone: 212-593-2255
Fax: 212-888-2841
Attention: Marc Kirschner
William Edwards

RELATED CASES
1:16-cr-00640-BMC USA v. Nordlicht et al
1:16-cr-00640-BMC-1 Mark Nordlicht
1:16-cr-00640-BMC-2 David Levy
1:16-cr-00640-BMC-3 Uri Landesman
1:16-cr-00640-BMC-4 Joseph Sanfilippo
1:16-cr-00640-BMC-5 Joseph Mann
1:16-cr-00640-BMC-6 Daniel Small
1:16-cr-00640-BMC-7 Jeffrey Shulse

Docket Items for the above cases can be located at the PACER portal for the Eastern District of New York, located here.