The $52 million question in Prime Capital Ventures’ bankruptcy case surrounds what happened to the money it invested in a hedge fund, The Real Deal reported. The dilemma is unfolding as Prime deals with an involuntary bankruptcy proceeding. 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.
