An investor recently shared a letter from Cherokee Acquisition, a firm that buys bankruptcy and distressed claims. The letter revealed Cherokee’s interest in acquiring claims tied to Linqto Texas, LLC (Case No. 25-90186) at discounted prices.
Cherokee’s Proposal
Cherokee laid out two ranges for its bid: claims above $100,000 were priced between 70% and 75%, while claims under $100,000 were offered between 65% and 70%. The company said that sellers could get an immediate cash payout, while Cherokee would take on the risk of waiting for distributions.
Deaton’s Perspective
Attorney John Deaton explained that firms like Cherokee operate by purchasing claims below their full value and profiting later when distributions or realizations occur. For example, an investor who put $100,000 into Ripple shares at $40 each could expect offers between $60,000 and $75,000 from such buyers.
However, with Ripple shares trading closer to $100 on secondary markets, and Ripple’s last tender offer at $175, the same investment could be worth more than $200,000 on paper. Deaton said that offers are usually based on the original investment rather than current unrealized gains, meaning sellers could be leaving significant value behind.
Why It Matters for Ripple Investors
Ripple’s private equity shares are not immediately accessible to investors. They will only become available after Ripple goes public and the lockup period ends. This waiting period creates an opportunity for firms like Cherokee to step in and offer liquidity.
While the offer provides a quick cash exit, it comes at a discount compared to the potential upside if Ripple completes an IPO. Deaton said that unless investors urgently need funds, holding might be the better long-term option.
“The bottom line is that investors were NOT going to get Ripple shares UNTIL Ripple has an IPO AND the lockup period expires. Therefore, you were not going to get Ripple shares for sometime. So unless you’re facing an emergency and need the money, I don’t see why one would sell,” Deaton wrote.
