Liability Resolution for Fund Closure
A fund had completed the sale of its final portfolio companies, but couldn’t close due to long-tail liabilities—including tax indemnities—tied to prior asset sales. Counsel needed a way to resolve or offload those obligations without keeping the fund open for years.
Roughly $25MM in cash was being held as collateral for open liabilities totaling around $20MM, some with potential multi-year timelines. The fund needed a clean exit for its investors – but couldn’t wait for every indemnity to expire or resolve.
Hilco stepped in to acquire the collateralized cash and assume full responsibility for monitoring, defending, and resolving the liabilities. By purchasing the exposure at a negotiated discount, Hilco created immediate liquidity and finality for the fund and its counsel.
The fund was able to fully wind down and distribute remaining capital, closing its books with no residual oversight obligations. Hilco managed all future claims, freeing the GP and LPs from years of uncertainty and compliance tracking.
