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
United States District Court for the Eastern District of New York
Case No.: 1:16-cv-06848-DLI-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.
- Complaint
- Exhibits to the Complaint
- Order Appointing Receiver Schwartz
- The Receiver’s First Quarterly Status Report for the Period December 19, 2016 through March 31, 2017
- Securities and Exchange Commission’s Application for an Order to Show Cause for Entry of a Second Amended Order Appointing Receiver and Appointment of a Substitute Receiver
- Securities and Exchange Commission’s Memorandum in Support of Its Application for an Order to Show Cause for Entry of a Second Amended Order Appointing Receiver and Appointment of a Substitute Receiver
- Declaration of Melanie L. Cyganowski dated June 26, 2017
- Declaration of Neal Jacobson Pursuant to Local Rule 6.1(d) in Support of Application for an Order to Show Cause
- Facsimile Letter from Melanie L. Cyganowski to Judge Irizarry Regarding the Proposed Order Appointing Receiver
- Order Approving Retention of Otterbourg P.C.
- Order Approving Retention of Goldin Associates LLC
- The Receiver’s Initial Status Report to the Court
Case Information
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.
230 Park Avenue
New York, NY 10169
Phone: 212-661-9100
Fax: 212-682-6104
Attention: Adam C. Silverstein
Erik B. Weinick
350 Fifth Avenue
The Empire State Building
New York, NY 10118
Phone: 212.593.2255
Fax: 212.888.2841
Attention: Marc Kirschner
William Edwards
1:16-cr-00640-DLI-1 Mark Nordlicht
1:16-cr-00640-DLI-2 David Levy
1:16-cr-00640-DLI-3 Uri Landesman
1:16-cr-00640-DLI-4 Joseph Sanfilippo
1:16-cr-00640-DLI-5 Joseph Mann
1:16-cr-00640-DLI-6 Daniel Small
1:16-cr-00640-DLI-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.
