Platinum Files for Chapter 15 Bankruptcy

by San Antonio Attorney

Platinum Partners filed for Chapter 15 on Oct. 18 as part of its liquidation attempt, according a federal court filing in New York.

In August, a court in Cayman Islands ordered that an external specialist needs to liquidate the purported offshore accounts of hedge fund Platinum Partners Value Arbitrage.  The firm is under investigation by authorities in the United States.

RHSW Caribbean, the liquidator, filed the bankruptcy petition to protect the assets of the company in the U.S. from creditors while a bankruptcy proceeding is in progress in the Cayman Islands.

Platinum was founded by Mark Nordlich about 10 years ago and made double-digit percentage profits for many years by investing in many disputable businesses, according to a special report by Reuters.

Platinum, which is based in New York, has been entangled in federal investigation by the Brooklyn and Manhattan U.S. Attorneys and also the Securities and Exchange Commission.

A few months ago, an associate was detained on charges of bribing an official of union to invest in the hedge fund.  He has denied the allegations.

RHSW says it is communicating with the Department of Justice and SEC and that Platinum is the center of asset overvaluation allegations.

RHSW notes that in June 30 Platinum stated $1.09 billion in assets for its flagship funds.  The same court filing states future liabilities of around $468.7 million.

The liquidators in Cayman have started assessing allegations of overstated assets and are investigating the cause of the firm’s downfall, the bankruptcy filing said.

One of the investigations conducted by the liquidator involved the possible sale of Implant Sciences Corp notes to insiders of Platinum, as stated in the bankruptcy filing.  There is also an ongoing review of an investment into Northstar Offshore Group LLC, the filing showed.

Northstar investments comprise 22% of the Platinum funds, based on the bankruptcy filing.  According to the liquidators, the Platinum’s holdings will significantly devaluate if Northstar becomes insolvent.

 

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