$52M missing in involuntary bankruptcy case of commercial lender

It’s the $52 million question in Prime Capital Ventures’ bankruptcy case: What happened to the money it invested in a hedge fund?

That’s the dilemma unfolding as Prime deals with an involuntary bankruptcy proceeding, the Albany Business Review reported. The commercial lender’s bankruptcy was initiated by three companies that allege they were defrauded by Prime, including two real estate developers. They claim Prime accepted $22.7 million in interest-payment deposits without the commercial lender issuing them loans or repaying the deposits when asked.

An attorney is serving as an interim trustee to oversee Prime’s assets as a federal judge determines whether to place Prime into Chapter 7 bankruptcy or dismiss the company’s case. Tracking down the interest deposits invested into Berone Capital, however, has been no easy task.

“I simply can’t find this $52 million,” Christian Dribusch said during a hearing this week. “I can’t get verification that it exists,” Dribusch added, declaring it the “biggest red flag” in front of him.

Prime offers lines of credit to clients who provide 20 percent of the value of the loan in advance to cover potential interest payments. Dribusch said Prime would then invest the interest deposits with Berone under a joint venture agreement.

The judge in the case is requiring Berone to disclose the value of Prime’s interest in the hedge fund and provide corroboration that the missing funds exist. Berone, which is based in Georgia, did not respond to the publication’s request for comment.

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An attorney for Prime, meanwhile, says the court has all the information the company has regarding the $52 million. The interim trustee was able to confirm the attorney’s claim that Berone has an account at the Royal Bank of Canada, but disputed that the account contained the full funding the court is hunting.

Kris Roglieri, Prime’s owner, also hasn’t responded to a request for comment. Dribusch has accused Roglieri’s company of failing to provide access to information Dribusch needs to manage the case.

Outside of the missing $52 million, Prime has $9.2 million stored across several bank accounts, according to a letter from the company’s prior counsel. The largest account has $7.3 million, but more than $4.8 million in liabilities as well.

— Holden Walter-Warner