Assumption of Loan Exposure to Enable Early Fund Closure
A fund was holding a small set of executive loans tied to stock compensation—a legacy exposure that technically wouldn’t mature until 2029, well past the fund’s intended wind-down. Legal counsel sought a solution to close the fund now, without waiting four more years to resolve repayment.
The fund had made multiple loans to company executives who opted to borrow against their equity to cover taxes, rather than selling shares prematurely. While the loan structure was sound, the extended maturity created an administrative and legal tail that complicated final distributions.
Hilco stepped in to purchase the outstanding loan receivables outright, assuming all repayment risk and taking over the full timeline for resolution. The fund received cash up front, while Hilco retained the opportunity—and responsibility—for future recovery.
The fund was able to close cleanly, distribute remaining capital to LPs, and avoid years of tracking, reporting, and managing residual exposure. Hilco’s willingness to price and purchase the uncertainty delivered immediate liquidity and long-term relief to fund stakeholders.
