Here’s yet another reason the city corrections officers’ union should be concerned about the $20 million it invested in troubled hedge fund Platinum Partners.
On Tuesday, a Cayman Islands judge ordered that the international unit of Platinum’s flagship fund be handed over to court-appointed “liquidators” amid serious new concerns about its ability to repay investors, The Post has learned.
Judge Andrew Jones of the Cayman Islands, where Platinum’s flagship fund is based, appointed liquidators from corporate restructuring firm RHSW Caribbean to unwind the flagship fund’s “international” unit after an investor complained that it asked for its money back last year and got zilch.
The RHSW liquidators are expected to ultimately seek control of Platinum’s “master” fund, where the Corrections Officers’ Benevolent Association $20 million was invested, sources said. The union pot includes pension and operating funds.
A spokesman for Platinum declined comment.
Platinum’s woes seemingly started in June when ex-COBA President Norman Seabook was arrested along with Platinum co-founder Murray Huberfeld.
Manhattan federal prosecutors say Seabrook gave Huberfeld COBA’s money to invest in exchange for cut of any profits. Huberfeld’s first payment to Seabrook came in the form of $60,000 stuffed in a black Ferragamo “murse,” or man purse, prosecutors said.
Weeks later, the New York FBI, acting on behalf of Brooklyn federal prosecutors, raided Platinum’s New York offices. That prompted the hedge fund, which claims to manage about $1.35 billion, to announce plans to shutter its funds and return investors’ money.
But the Cayman Island’s court filing suggests Platinum was having trouble repaying investors well before the FBI and Manhattan federal prosecutors swooped in.
New Zealand’s Parris Investments Ltd, an investment entity, told the court it asked for its money back in October and was supposed to be paid in December, according to court documents reviewed by The Post.
Instead, Platinum kept pushing back payment on the investment, estimated to be worth $1 million, Parris told the judge. In early February, Platinum told Parris the money would imminent. A few weeks later, it pushed the deadline back to the April-June period, Parris said.
Parris filed its complaint in July.
Acting COBA President Elias Husamudeen has sought to reassure the union’s 9,000 members, who work on Rikers Island and other city prisons, that their investment is safe.
But persistent questions about the status of COBA’s $20 million have led to repeated clashes between COBA members and the executive board, some of whom approved the investment.
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