NEW MOUNTAIN FINANCE – A PLATINUM $30M CASUALTY

platinum partners

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: CIVIL TERM: PART 39
———————————————-X
NEW MOUNTAIN FINANCE CORPORATION,
PLAINTIFF,
-against-
PLATINUM PARTNERS VALUE ARBITRAGE FUND, L.P.,
DEFENDANT.

60 Centre Street
New York, New York 10007
June 15, 2016

B E F O R E:
THE HONORABLE SALIANN SCARPULLA,
J U S T I C E

A P P E A R A N C E S:
LOWENSTEIN SANDLER, LLP
Attorneys for the Plaintiff
1251 Avenue of the Americas
New York, NY 10020
BY: Matthew M. Oliver, Esq.
Richard Bernstein, CPA
Index No:
651186/2016

GOLENBOCK ETSEMAN ASOR BELL & PESKOE, LLP
Attorneys for the Defendant
437 Madison Avenue
New York, NY 10022
BY: David J. Eiseman, Esq.
Matthew C. Daly, Esq.

http://iapps.courts.state.ny.us/iscroll/SQLData.jsp?IndexNo=651186-2016&Submit2=Search

Platinum Partners – The New Mountain Finance Ponzi Scheme and $30M… A Path Toward Liquidation

The other day we posted an article on Platinum Partners and one of many lawsuits pending against the company. Of particular interest for the purposes of this article is New Mountain Finance Corporation v. Platinum Parnters Value Arbitrage Fund. Key to the subject litigation is whether or not Platinum Partners is solvent.

We firmly believe that Platinum Partners is not solvent and that the partners have fully and completely drained the company of its finances through a series of shade and highly complicated deals.

It would appear from the interchange in the transcript we have posted below that the judge (in red) does not disagree, or at least wants to watch as the game plays out. In fact, the interchange regarding the secured versus unsecured 30$M debt is rather amusing.

The transcript can be viewed below and we have provided links to the entire NYS Court Website for review of the entire case. 

 


25 MR. OLIVER: Your Honor, there’s no evidence
26 that money is being dissipated because they won’t give us

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2 access to any financial information at all and that’s
3 access that we’re entitled to under this contract. So
4 respectfully to counsel, he’s trying to force us to prove
5 the negative. And that, in addition to the concerns your
6 Honor noted about the value of the fund and this
7 voluntary wind-down proceeding at their own pace, we have
8 real serious concerns about what’s going on within this
9 entity, which is what motivated us to send a letter under
10 Cayman Islands law in the first place.
11 If counsel is prepared to stipulate on the
12 record that there will be no dissipation of assets, no
13 transfers, no distributions, you know, maybe that’s
14 something we can talk about that factors into a bond.
15 But we have very serious concerns about the value of
16 those assets, how they’re going to be treated and whether
17 there’s going to be anything left for us at the end of
18 the day.
19 And I hear counsel loud and clear with respect
20 to the solvency, but if they’ve got over a billion
21 dollars in assets, why didn’t they pay us the
22 seven-and-a-half million and why can’t they pay the 30?
23 It’s peanuts in comparison to what the total amount of
24 the assets that they’re claiming.

25 MR. EISEMAN: There is a real dispute here,
26 your Honor. They keep talking like they’ve proved their

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2 case, which they haven’t done, we owe the money and we
3 haven’t paid it; that’s not case. They chose to bring
4 this to summary judgment in lieu of complaint. We’re
5 opposing that. We believe we’ve raised real issues with
6 respect to that which we heard on July 7th.
7 Right now, they’re asking you to post a bond in
8 an amount that’s based on their speculative concern that
9 something’s going to happen with respect to this fund.
10 And there is not a single piece of evidence in the record
11 to support that.
12 So I would ask the Court —

13 THE COURT: Well, let me ask you this: Are you
14 willing to state on the record that the fund doesn’t
15 intend to liquidate or sell off assets or file for
16 bankruptcy protection or do any of those things that
17 would put this billion dollars that you say the fund is
18 worth? I mean, the way that you’re speaking is as if the
19 plaintiff has got nothing. I haven’t seen then any proof
~0 from you that the fund is worth a billion dollars. As
21 far as I know, the fund is worth five cents. I have no
22 idea. I do see a lot of press about some very crazy
23 things going on. I agree with you that those are all
24 hearsay, but you haven’t put up a piece of paper that
25 assures me that the fund has a billion dollars either.
26 So I go back and I ask you: Are you willing to

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2 state on the record that none of that will happen between
3 now and, say, the end of this case?

4 MR. EISEMAN: I would have to ask my client.
5 Obviously, if I can make that representation, I’m happy
6 to go make that call.

7 THE COURT: Make the call please.

8 MR. EISEMAN: Let me make sure what it is that
9 you would want them to say.

10 THE COURT: No liquidation, no bankruptcy
11 filing —

12 MR. EISEMAN: I’m not sure that they can
13 actually say that they’re not going to file bankruptcy as
14 a matter of public pol-icy. And anyway, if they did file
15 bankruptcy, they’re not entitled to get what they’re
16 entitled to. They’re only entitled to get what they’re
17 entitled to in bankruptcy.

18 THE COURT: Absolutely. Right? So why should
19 they take the risk?

20 MR. EISEMAN: Because that’s what happens in
21 bankruptcy. Every non-secured creditor —

22 THE COURT: Absolutely not true if they went to
23 the Cayman Islands right now and forced you to liquidate
24 right today. If they filed — if I can let them continue
25 in the Cayman Islands, it’s a whole different situation;
26 that’s my point. You filed bankruptcy here in New York.

 

Transcript

http://iapps.courts.state.ny.us/iscroll/SQLData.jsp?IndexNo=651186-2016&Submit2=Search

 

 

 

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