found it Interesting that the below WSJ article comes out on October 7th (Friday) stating PP planned to pay back around $80 million to investors in the coming months. Then on October 10th, (Monday)Implant Sciences Corporation (ISC) declares bankruptcy and announces L3 plans to acquire their assets for $117.5 million of which approximately $80 million was owed to Platinum Partners. Is the $80 million referenced in the article the money they expected to receive from ISC? If so, when did they know ISC was declaring bankruptcy?
Hedge Fund Platinum Partners to Pay Back Fraction of What Firm Owes
The hedge fund is under federal fraud investigation
ROB COPELAND
Updated Oct. 7, 2016 11:39 p.m. ET
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Hedge fund Platinum Partners plans to pay back around $80 million to investors in the coming months, less than 10% of what the firm owes in total, according to people familiar with the matter.
Platinum, whose practices are the subject of a federal investigation, as of this summer said it had $1.25 billion under management.
Its executives, as recently as this month, continued to tell investors they hope to return the entirety of that sum over time, though they haven’t said exactly when they will do so.
Bernard Fuchs, one of the firm’s co-owners, will likely be among those paid first, the people said. Mr. Fuchs, 70 years old, had requested last year to pull some of his money even as he encouraged other investors to stay put, the people said.
Mr. Fuchs said he requested the money back “for charitable donations” connected to his foundation. He said the withdrawal constituted “a fraction of my money in the fund.”
probe focused on Platinum, which had reported some of the most consistent returns in the hedge-fund industry. In addition, in June, Platinum co-founder Murray Huberfeld was arrested for his role in the alleged bribery of a New York City Correction Officers’ Benevolent Association official in exchange for an investment. Mr. Huberfeld and the union official denied wrongdoing.
That same month, Platinum announced it would suspend all redemptions and move to liquidate. The firm has said it is cooperating with all investigations.
The issue of how much Platinum will be able to repay investors is central to the uncertainty that surrounds the firm. The Wall Street Journal earlier this year reported that federal authorities are questioning whether Platinum misstated the value of its investments, which include assets like loans to struggling companies. A Platinum spokesman earlier said it stands behind its performance record.
Write to Rob Copeland at rob.copeland@wsj.com
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