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

Platinum Receivership


Case Information

RECEIVERSHIP ENTITIES
Platinum Credit Management, L.P.
Platinum Partners Credit Opportunities Master Fund L.P.
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.
Platinum Partners Liquid Opportunity Master Fund L.P.
Platinum Partners Credit Opportunities Fund International Ltd.
Platinum Partners Credit Opportunities Fund International (A) Ltd.

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) 905-3672
Attention: Erik B. Weinick

FINANCIAL ADVISOR TO RECEIVER
Teneo Capital, 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.

Updates

On April 27, 2021, in accordance with the Court’s December 1, 2020 Order Establishing the Receiver’s Claims and Interests Reconciliation and Verification Procedures [Dkt. 554] (the “Verification Order”),the Receiver’s Claims and Noticing Agent mailed Investor Statements (each a “PPCO Investor Statement” and collectively the “PPCO Investor Statements”) to the limited partners of Platinum Partners Creditor Opportunities Master Fund L.P., and the Investors in Platinum Partners Credit Opportunities Fund LLC, Platinum Partners Credit Opportunities Fund (BL) LLC, and Platinum Partners Credit Opportunities Fund (TE) LLC.

The limited partners in Platinum Partners Liquid Opportunity Master Fund L.P., and its feeder funds, will not receive a PPCO Investor Statement, but will be sent a separate Investor Statement regarding their interests, and are not subject to the deadlines set forth in the PPCO Investor Statements.

Pursuant to the Verification Order, each PPCO Investor Statement assigns each Investor an individual receivership investor number unique to that Investor. The respective receivership investor number will be used by the Receiver to identify individual investors in public filings with the Court.

The amounts reflected in the PPCO Investor Statements are not necessarily equal to or indicative of any recoveries an Investor may receive from one or more Receivership Entities. The eventual distribution of funds will be subject to the Receivership’s total assets available for distribution after the Court approves a distribution plan and approved methodology for distribution to investors and creditors.

If an Investor disagrees with the information contained in the PPCO Investor Statement, the sole basis for an Investor Objection to the information reflected in a PPCO Investor Statement shall be that the books and records of the Receivership Entities are inaccurate. Only an Investor or their counsel may file an Investor Objection, and no other party may file an objection to the information reflected in the PPCO Investor Statement. Investor Objections should not be filed with the Court in the Receivership, instead they must be sent to the Receiver at the email address platinumreceiver@otterbourg.com. Unless otherwise indicated on an Investor Statement, Investor Objections to the PPCO Investor Statements must be submitted to the Receiver so that they are actually received by the Receiver by no later than June 11, 2021.

If an Investor, or their counsel, does not timely submit an Investor Objection, the Investor will be deemed to have agreed with the information listed, and the information set forth in the PPCO Investor Statement shall control and shall form the basis for calculating the allowed amount on account of the Investor’s Interest, and the Investor will be permanently precluded from objecting to or contesting the information in the PPCO Investor Statement.

If an Investor, or their counsel, timely submits an Investor Objection, a representative of the Receiver will contact the Investor or their counsel to attempt to resolve the Investor Objection in accordance with the Verification Order, which may include, with the Investor’s consent, submitting the dispute to mediation.

To be eligible to receive a distribution, if any, an Investor must complete and return a Form W-9 and wire instructions by email to platinumreceiver@otterbourg.com or by mail to Platinum Partners, 230 Park Avenue, Third Floor West, Suite 323, New York, NY 10169.

Key Documents

Protocols for Parties in Interest to Be Heard on Receiver Motions

Beechwood Litigation

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

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.

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.

Webinar Videos

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