Dear PeerStreet Investors,
Thank you for your inquiries about the recent initial interim distribution. Since the initial distribution was made last week, we have received hundreds of emails about the distribution and the timeline/projections for future distributions.
Although we have tried to respond to emails asking individualized, investor-specific questions, most of the email inquiries contain the same, similar questions. To that end, and to make sure everyone has the same information, we decided to address the common questions below.
If you feel your question has not been answered, please email us again and we will try to address.
Thank you,
The PeerStreet Team
Q: Why is this the amount of my distribution?
A: PeerStreet and its professionals are currently in the process of reconciling thousands of claims filed against PeerStreet’s bankruptcy estates. Although the majority of the investor claims filed against PeerStreet appear to assert a valid, underlying claim, a significant number of claims are at least partially disputed. A claim could be disputed because, among other things, the amount asserted in it is larger than the amount reflected in PeerStreet’s books and records or where an investor filed the same underlying claim multiple times.
As a matter of due process, the chapter 11 plan confirmed in PeerStreet’s bankruptcy case (the “Plan”) requires PeerStreet to maintain cash reserves sufficient to make distributions to investors who asserted disputed claims in the event a disputed claim is ultimately allowed. For example, if an investor holding a valid claim filed multiple proofs of claim on account of the same, underlying investment, PeerStreet is required to reserve enough cash to make a distribution on account of each duplicative claim. The reserves are funded by reserving cash that would otherwise be distributed to investors with undisputed claims. Once the disputed claims are resolved (either by stipulation, order from the Bankruptcy Court, or the investors’ withdrawal of their disputed claims), then PeerStreet will be permitted to reallocate the reserves to make additional distributions to holders holding valid claims.
As you may be aware, on March 15th, prior to confirmation of the Plan, PeerStreet’s bankruptcy attorneys filed claim objections against hundreds of disputed claims with the goal of maximizing the amount of cash PeerStreet is authorized to distribute in the initial interim distribution by resolving a significant portion of disputed claims prior to confirmation. Unfortunately, the Bankruptcy Court did not sustain the objections against the vast majority of claims and the hearing on those claim objections was rescheduled to August 7th.
Q: How can I withdraw my available funds?
A: If you have a PeerStreet IRA account, no action is needed. We will handle rolling over all available funds to the self-directed IRA account linked to your PeerStreet account. You should receive an email notification once this transfer has been initiated. Given the high volume of transfers, this may take up to 5 business days or so.
For all other accounts, withdrawals can be made directly via the website
here.
Q: How much should I anticipate receiving?
A: We currently expect that your ultimate recovery (inclusive of your initial interim distribution and any future distributions you may receive) will fall within the “Projected Recovery” percentages set forth in
Section 4.3 of the Plan.
Q: How much should I anticipate in the next distribution?
A: We cannot provide you with an estimate at this time, but we are doing our best to reconcile claims, pursue objections to disputed claims, keep administrative costs to a minimum and return as much as we can to PeerStreet investors as quickly as possible. Please note that it is possible that the next distribution will be a second interim distribution and may not reflect the aggregate amount of distributions you will receive once all disputed claims are resolved.
Q: When should I anticipate the next distribution?
A: A hearing is scheduled for September for the Bankruptcy Court to consider a significant number of disputed claims. If the Bankruptcy Court generally agrees with our assessment of the disputed claims and enters orders sustaining our objections, then we may be able to make a second interim distribution in late August or early September.
If any of your claims were included as disputed claims in PeerStreet’s filed omnibus objections and you agree with PeerStreet’s proposed corrections to your claims (i.e., if you agree that certain of your claims are duplicative), please respond to this message accordingly so that PeerStreet may enter a stipulation with you resolving your disputed claims. The sooner disputed claims are resolved, the sooner PeerStreet will be in a position to make additional interim distributions.
Q: Should I expect to receive any further distribution on my uninvested cash balance?
A: PeerStreet has satisfied 95% of the uninvested cash balances on its books and records, and only 5% remains. As discussed in Section 7.3(i) of the Plan, this 5% is attributable to a shortfall in the account that was used to fund distributions to holders of investors in that account. PeerStreet believes this shortfall relates to underfunded promotional programs. We are currently reconciling PeerStreet’s books and records and do not have any additional information about this issue at this time.
Q: Where can I find my statements and/or tax forms?
A: All past statements and tax documents continue to be available on the website
here.
