Receiver for Platinum Partners Completes Sale for Creditors
December 9, 2018
Melanie L. Cyganowski, chair of Otterbourg’s Bankruptcy Practice, acting in her capacity as the court-appointed receiver of a group of funds commonly known as “Platinum Partners” (“Platinum”), recently completed the sale of Platinum’s interests in a gold tailings impoundment known as the “Abdala Tailings Project,” located outside of Cuiababa, Brazil.
As a result of the sale, the Platinum receivership estate received $27.5 million in cash at closing, plus additional and potentially highly valuable consideration based on resource validation results and future mining revenues. The cash at closing was subject to payment of certain fees and taxes. In addition to the cash up front, the receivership is entitled to $3 million in cash royalty advances approximately six months after closing – at the end of May 2019 -- if gold content is validated to exceed 9 grams per ton. Finally, the receivership is entitled to receive a 7.5% royalty on cash revenues after the purchaser, an affiliate of Centerbridge Partners, L.P., achieves a 3.0x multiple of invested capital.
Otterbourg attorneys Adam C. Silverstein, Phil C. Berg, Jennifer S. Feeney and Erik B. Weinick served as primary legal counsel to the Receiver, while Houlihan Lokey Capital, Inc. served as the receiver’s investment banker, with additional financial advisory services provided by Goldin Associates, LLC. Ms. Cyganowski serves as the Platinum receiver pursuant to an order issued by the U.S. District Court for the Eastern District of New York in the matter entitled, Securities and Exchange Commission v. Platinum Management (NY) LLC, et al., Case No. 16-cv-6848 (BMC).