Washer

Bart M. Schwartz

Dear Investor:

As you may know, I am the court-appointed Receiver for certain Platinum Partners Credit Opportunities (“PPCO”) and Platinum Partners Liquid Opportunity (“PPLO”) entities (together, the “Funds”), and in that capacity I have been assigned to take control of the Funds and to wind them down in an orderly fashion.  I write to tell you about my responsibilities and intentions as Receiver, and to provide an update about what I and my team have accomplished to date.

The Receivership Order
On December 19, 2016, at the request of the Securities and Exchange Commission, the United States District Court for the Eastern District of New York appointed me as Receiver.  In that capacity the court directed me, among other responsibilities, to identify and take possession of all assets of the Funds, to preserve and to prevent dissipation of assets, and to conduct an orderly wind down of the Funds for the benefit of creditors and investors.  I have already begun this process in earnest.

My Approach to the Receivership
We intend to purposefully and prudently liquidate the Funds’ investments and generate cash whenever possible. However, we do not intend to engage in a fire sale and are not interested in impairing value for the sake of generating cash. During the course of the Receivership, it may be necessary for the Funds to commit additional capital to preserve a position’s value or move it closer to a liquidation event. I ask for your patience as we work to sell investments and generate cash.

Investment Portfolio
The Funds’ investment portfolio largely consists of a variety of debt and equity positions in the energy, mining and other sectors. The Funds’ assets are largely illiquid and will take some time to monetize. The portfolio consists of interests in non-public operating businesses that may require additional capital or improved positioning to become liquid. At my direction, the team has initiated a review of the Funds’ investments and business arrangements. To assist our team, we are in the process of engaging a valuation firm to perform an independent valuation of the portfolio. 

The completion of our work on valuation is a major priority. Our goal is to return the Funds to a more normal reporting schedule and put ourselves in position to produce estimated Net Asset Values (NAV) on a more routine basis. We expect this initial valuation work to continue for several months.

The previous Platinum management team reported the “indicative NAV” of PPCO at roughly $520 million and of PPLO at roughly $16 million as of September 30th, 2016. It produced the indicative NAVs by following its usual valuation procedures. Though we have just initiated our review, thus far we have not observed a major shift in overall portfolio value since the release of the September indicative NAVs as provided by the previous Platinum management team.

Operational and Administrative Matters
My team and I have been busy in the few weeks since the inception of the Receivership.  We prioritized cost reductions (some of which were already underway as of the start of the Receivership) by, among other things, reducing personnel costs by approximately $100,000 per month and reducing rent by approximately $140,000 per month.  Substantially all bank and other key accounts have been transferred to my control, and I am in the process of transferring the remaining accounts, none of which have substantial assets.

I have communicated to Platinum staff a designated chain of command so that all decisions about investments, expenditures, legal issues, or any other matters are made by me or by a designated member of the Receivership team.

We also secured the release of a Temporary Restraining Order entered in bankruptcy court in Texas that had been severely restricting our ability to preserve assets and successfully wind down the Funds.  I now have the control I need to properly manage and oversee the Funds’ investment portfolio and to pursue the goals of the Receivership.

Audit and Tax
We are in the process of engaging an audit and tax firm to begin work on the Funds’ 2015 audit and K-1s, with a 2016 audit and K-1s to follow thereafter. To begin the necessary preparations for the audit, we will be performing and documenting internal control procedures and performing walkthroughs in addition to other related activities.

Next Steps
As mentioned above, we are working on generating cash so that the Funds may address their outstanding debt and unpaid redemptions, thereby paving the way for distributions to limited partners. As of December 31, 2016, the outstanding secured debt against PPCO was roughly $85 million, and PPCO had unpaid redemptions of at least $27 million. PPLO does not have secured debt; as of December 31, 2016, PPLO had unpaid redemptions of at least $6 million.

I understand that this is an uncertain time, and that in many cases your investment in the Funds may have been tied up far longer than you may have anticipated. Please know that we are aware of your concerns and are working diligently to put ourselves in position to return funds to you in a fair and equitable manner as soon as reasonably possible.

We have established this website, www.platinumpartnersreceiver.com, to help keep you informed about the Funds and Receivership and to provide regular updates about our progress.  We kindly request that you complete and return to us a Contact Information Form so that we ensure we have the most updated contact information for you. Additionally, should you wish to receive investor communications electronically going forward (which we encourage), please so indicate by checking the appropriate box.

I am joined in this effort by a talented team of experienced professionals. Many of you have already spoken with Bob Rittereiser and Michael Klett, who continue to assist me in this effort and are the primary points of contact for investor inquiries. We are joined by Dan Burstein, who handles legal issues and matters relating to management of the Receivership.

I look forward to communicating with you in the months ahead for the benefit of all stakeholders.

Very truly yours,


Bart M. Schwartz
Receiver

platinumreceiver@guidepostsolutions.com

Robert P. Ritterieser

rrittereiser@guidepostsolutions.com

Michael D. Klett

mklett@guidepostsolutions.com

Daniel M. Burstein

dburstein@guidepostsolutions.com