Why is NIR Group Selling Investments for Little Cash Down?

NIR Group is offering sweet deals to third party funds who will convert their PIPE notes for them. I reported on one of the firesale deals this week for DealFlow Media and am still left wondering why NIR is asking for so little money down. To read the details of the deal, based on transaction documents I saw, go buy the DealFlow story.

When I interviewed NIR’s new attorney Brad Gertsman he couldn’t detail why NIR thought this was the best method to maximum the value of the investment—just that it was. The issues raised in my DealFlow story center on NIR’s liquidation strategy, which is being led in tandem with Cayman Islands offshore liquidator PwC. Gertsman also said that statements made by an unnamed person involved in the deal regarding Bobby Cohen telling potential buyers of NIR notes that they could not legally convert notes to stock right now were totally false.

If you read the DealFlow story…I’d love to hear from market participants or sophisticated investors on what you think NIR Group is trying to do here.

Editors Note: According to the NetCo (penny stock PIPE deal NIR did in 2002) term sheet, that was written by NIR Group, this is the list of NIR Group funds involved in the sale transaction. The last two funds are under control of the Cayman Islands court appointed liquidator PricewaterhouseCoopers.
AJW Partners, LLC
AJW Partners II, LLC
AJW Offshore, Ltd.
AJW Master Fund, Ltd.
AJW Qualified Partners, LLC
AJW Qualified Partners II, LLC
New Millennium Capital Partners II, LLC
New Millennium Capital Partners III, LLC
AJW Offshore II, Ltd. (PwC Corporate Finance and Recovery)
AJW Master Fund II, Ltd. (Pwc Corporate Finance and Recovery)

UPDATE 11-10-11 : In the early afternoon of October 27th I emailed NIR’s Bobby Cohen asking for comment on the NetCo sale to a thrid party fund that I was about to report for DealFlow Media. I listed statements made by multiple people involved in the deal and Bobby wrote the statements by my sources were totally false. I also interviewed NIR’s outside counsel Brad Gertsman three times that day about the details we were looking to verify. The information I uncovered for the story appears to set off NIR founder Corey Ribotsky because I just confirmed with the Nassau County 6th district police that a parking valet at NIR’s Roslyn office, on 1044 Northern Blvd, called the police saying he was being threaten by a building occupant. The call came in at 3:47 pm and a person at the scene said the occupant was Corey Ribotsky. It appears by the time the cops got there no police action was needed and the Nassau Police public affairs officer confirmed no charges were filed–but clearly something set Ribotsky off.

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Comments

  1. NIR Onshore Investor says:

    Simon Conway, of PwC, says they are not selling a significant share of the overall portfolio, but maybe this is a bit of a misstatement too. They could be selling off a large portion of their most liquid notes to raise cash, even though that might be a small portion of the nominal value of the fund. Personally, I would argue that the nominal value is irrelevant here, and only the liquid portion has real value in the short term.

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  3. Dear Teri,

    This is a call out to the other onshore investors in AJW, like myself. We need a court-appointed trustee to represent us.

    NIR itself hasn’t provided any information in a long time, as we all know. PWC, the fund liquidator, won’t even put us on their mailing list, so that is a pretty clear indicator of where we stand with them. The Dept of Justice and the SEC also refuse to keep us informed, saying that they can’t “publicly comment” on anything.

    Together with a small group of other onshore investors, I am exploring the idea of sharing legal expense and petitioning collectively for a court-appointed US trustee. The SEC fraud complaint should be a good starting basis for this. Such a petition would be much less costly than a lawsuit, and just imagine having a trustworthy representative, responsible to us, replacing the NIR Group in supervising the onshore funds.

    So far we are only a very few people. Each additional investor would make a big difference.

    If you might like to be included, please e-mail me. Your communication will be kept in strictest confidence. jim.nail.nir.group@gmail.com.

    Thanks!

  4. NIR Follower says:

    AJW Offshore, Ltd.
    AJW Master Fund, Ltd.

    are now both in liquidation (PwC appointed over them as well)

    http://www.gazettes.gov.ky/gazettes/2011/21/11/gazette-issue-24

  5. Gaylord Layton says:

    Is Jim Nail a real investor or was he at one time associated with AJW.

    I am a individual investor in AJW on-shore. I am not a money manager or vested in the investment business

  6. According to investor letters and statements I’ve seen Nail is an investor in the AJW onshore fund. He has never worked for the fund. He invested with his own money and money from a fund he ran.

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