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

Platinum Receivership


Frequently Asked Questions

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1. Who is the Receiver and what are her responsibilities?

The Court appointed Melanie L. Cyganowski, Esq., as Receiver to marshal the assets of the entities in Receivership and, ultimately, develop a plan for the disposition of these assets. In addition, the Receiver will file periodic reports with the Court regarding her activities. These reports will be posted to this website after they are filed with the Court.

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2. Is the Receiver my lawyer?

The Receiver is not your lawyer, and she cannot provide you with legal advice. She is the Court’s agent, and she is charged with effectuating the provisions of the Court’s Orders.

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3. What is the status of the claims process?

Pursuant to the previously-approved bar date procedures motion [Dkt. No. 453], the bar date to file a proof of claim asserting a claim arising before the Receivership was March 29, 2019 and the bar date for governmental units to file a proof of claim was April 12, 2019. Parties holding investor claims, claims for unpaid redemptions and unpaid administrative claims were not required to file proofs of claim. In accordance with the Order approving the procedures to reconcile claims and verify interests, entered on December 1, 2020 (the “Claims Procedures and Verification Order”) [Dkt. No. 554], Platinum’s CFO and the Receivership Team engaged in an extensive review of each of the filed claims. The Receiver completed her review and filed a Notice of Receiver’s Claims Analysis Report (the “Claims Report”), which sets forth her determinations with respect to each of the claims. [Dkt. No. 564] The Claims Report provides the basis for the disallowance or partial disallowance for each of the claims, as applicable. Parties who filed claims are encouraged to review the Claims Procedures and Verification Order and the Claims Report for further information.

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4. What information is available to investors regarding my equity interests in one or more of the receivership entities?

The Claims Report described in question 5 above solely relates to general unsecured claims and secured claims. In accordance with the Claims Procedures and Verification Order, the Receiver sill be sending to investors, including unpaid redeemers, in or around April/May 2021 a letter that contains information regarding that investor’s equity interest in one or more receivership entities (the “Investor Letter”). The Investor Letter will set forth the amounts invested in one or more receivership entities and the amounts previously received as distributions on account of the investor’s equity interest, all as reflected in the books and records of the receivership entities. Investors will have an opportunity to review the information provided and refute the information provided, but solely on the basis that the books and records of the receivership entities are inaccurate, which must be supported by documentation from the investor. The investor will also be asked to provide a W-9 statement and wire instructions to receive any distribution (if the investor is ultimately entitled to a distribution).

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5. Will I get all of my money back?

The Receiver is currently in the process of preparing a plan of distribution and cannot at this time state what recoveries may be for investors. The Receiver, however, does not expect that investors will recover 100% of their invested funds. Indeed, they will recover significantly less.

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6. When can I expect to receive a distribution?

The timing of any distributions is unknown at this time. Following approval of a plan of distribution, the timing of distributions will also be impacted by, among other things, the resolution of certain of the larger disputed claims (for which the establishment of reserves may be required).

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7. Will any investors be paid ahead of others?

The Receiver has not yet devised a plan by which funds will be distributed to investors. The Receiver, however, is mindful that any such plan must be fair and equitable. That plan will ultimately be subject to review and approval by the Court upon proper adequate notice to all investors.

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8. If the Receiver believes that it is likely investors will not recover 100% of their invested funds, then should investors “write-off” their investment?

The Receiver cannot provide investors with tax advice; thus, everyone should consult their own tax advisor on this issue.

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9. When can I expect to receive a K-1 Statement for the 2020 Tax Year?

Preparation of PPCO’s and PPLO’s 2020 tax returns has been completed and the Receiver mailed K-1s to investors on or about June 22, 2021. In 2020, the IRS released revised instructions for partnerships required to report capital accounts to partners on Schedule K-1 (Form 1065). Pursuant to the new IRS instructions, the partners’ capital account disclosed in section L of the schedule K-1 is prepared on the tax basis method (not GAAP). As a result, the beginning account balance may differ from the prior year’s ending capital balance which was reported on a GAAP basis. The partner tax basis capital amounts do not represent an investor’s adjusted tax basis in the partnership and should be determined in accordance with applicable federal and state provisions. In addition, the amounts listed on the K-1s are not necessarily reflective of what distributions investors may ultimately receive in this case. The Receiver cannot provide any tax advice. Investors are encouraged to consult their own tax advisor on the impact of the K-1 statements on individual tax returns.

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10. How can I stay informed of progress in this case?

Periodic review of this website is the best way to stay abreast of developments in this Receivership. The website will be updated on a regular basis.

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11. If I have other questions, how can I get them answered?

You can contact the Receiver by emailing platinumreceiver@otterbourg.com or calling William Edwards at Teneo Capital, LLC, tel. no. (212) 593-2255.

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12. Who can I contact regarding any of my questions as a PPVA (USA) investor?

Borrelli Walsh has been appointed in the Cayman Islands to serve as liquidator of PPVA (USA). If you are a PPVA investor, please email your questions to ppvaonshore@borelliwalsh.com or call Robert Shifman at (345) 743-8800.

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13. How will the jury verdict in the criminal trial of Mark Nordlicht, David Levy and Joseph SanFilippo impact the receivership?

The Receivership was established with Mark Nordlicht’s consent in the civil enforcement case brought by the Securities and Exchange Commission titled SEC v. Platinum Management (NY) LLC, et al., case No. 16-cv-06848 (E.D.N.Y.) (BMC). Unlike the criminal trial, it is a civil action which will, at a certain point, be resolved before Judge Cogan. Our role is to administer the Receivership. We are not involved in either the prosecution of the criminal case by the Department of Justice or the advancement of the civil litigation by the SEC. The Receiver will continue her work as governed by the Court Orders, and will continue to provide updates on her progress.

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