Ranger Direct Lending: Princeton fund files for bankruptcy

By Daniel Lanyon on Monday 12 March 2018

Alternative Lending

The closed-ended fund’s legal drama is continuing apace.

The closed-ended fund’s legal drama is continuing apace.

Investors in the Ranger Direct Lending fund have a new obstacle to cross in their search for clarity over the portfolio’s exposure to the collapsed Argon Credit lending platform, via the Princeton Alternative Income fund, which has made an 11th hour filing for bankruptcy.

Arbitration proceedings against Ranger's largest portfolio holding the Princeton Alternative Income fund have been ongoing for many months with a potential result seemingly in sight.

The initial arbitration proceedings took place over 20 November 2017 to 30 November 2017 but were continued to a four-day period from 18 January 2018 in order to accommodate new testimony. This was ultimatley estimated to require an additional two-day hearing period scheduled to conclude by 9 March 2018.

Following conclusion of the testimony arbitration panel would have up to 30 days to make a decision and investors would know how much if any the Princeton holding would cost the fund.  However, Princeton filed voluntary petitions of bankruptcy on 9 March 2018.

Ranger says “the filings came hours before the three-judge arbitration panel was to rule on an application for an order requiring Princeton to hold and segregate all revenues generated by its investment activities, pending further order of the panel.”

The bankruptcy petitions will now have the effect, Ranger adds, of staying the first phase of the arbitration against Princeton and also stopping the ruling on the segregation order being delivered.

The Company is disappointed that the bankruptcy filing has stalled the first phase of the arbitration, but believes that the bankruptcy filing does give rise to potential benefits in the process of getting visibility into the Princeton Funds' portfolio valuation and ultimately redeeming the investment it has made,” Ranger said in regulatory filings.

Now that a bankruptcy petition has been made the activities of Princeton and the General Partner will be monitored by a bankruptcy court, it adds.

Within its bankruptcy petition, Princeton says the estimated aggregate value of its assets is between $50m and $100m, and it has estimated liabilities of between $1m and $10m, Ranger says although this cannot be verified.

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