Ranger Alternative Management, II, Ranger Direct Lending Fund Trust & Ranger Specialty Income Fund filed with the U.S. Bankruptcy Court a motion to appoint Examiner in Princeton Alternative Income Fund’s case.
The motion explains, “The appointment of an examiner under Section 1104(c) of the Bankruptcy Code is both needed and required in these cases. An independent and disinterested person is required to investigate (1) the pre-petition fraud and misconduct of the Debtors, including numerous conflicts of interest, related-entity claims and claims of the Debtors’ estates against related entities and/or current or former insiders; (2) the decision of Debtors to file the Bankruptcy Cases on the eve of the conclusion of an Arbitration proceeding involving claims of fraud, breach of fiduciary duty and breach of contract against Debtors; (3) whether such decision and the purported appointment of a Microbilt-controlled entity as the substitute general partner of PAIF at a time when PAIF was solvent and more than 90% of investors already made redemption demands was a breach of fiduciary duty; (4) whether the conduct of Debtors in the Bankruptcy Cases to date with respect to the use of investors’ funds in abrogation of the contractual redemption rights of the vast majority, by amount, of the direct and indirect investors of PAIF is justified and appropriate; and (5) whether Debtors have withheld information from investors and/or provided incorrect or incomplete information to investors regarding the use of their invested funds….Given the nature of the allegations in these Bankruptcy Cases and the obvious relationship between PAIF and insider persons and parties, the Debtors are incapable of independently investigating and reporting on their own prepetition conduct and actions. While a creditor’s committee could conduct an investigation, there will be no committee in this case….Finally, an examiner’s investigation has little, if any, downside. While appointing an examiner will entail costs, the incurrence of investigative costs is inevitable. Besides, it is Ranger and the other investors who will ultimately bear such cost, so PAIF has no room to complain.”
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