Ripple investors will receive discount claim offers from Cherokee. Deaton explains the outlook for the IPO

Investors recently shared a letter from the acquisition of Cherokee, a company that purchases bankruptcy and distressed claims. The letter revealed that Cherokee had discounted the price on getting a claim related to Linqto Texas, LLC (Case No. 25-90186).

Cherokee's proposal

Cherokee placed two ranges for bidding. Bills over $100,000 were priced at 70% to 75%, while bills under $100,000 were offered between 65% and 70%. The company said sellers could get cash payments right away, but the Cherokee would take on the risk of waiting for distribution.

Deaton's perspective

Attorney John Deaton explained that companies like Cherokee operate by purchasing claims that are completely below the claim and making profits when distribution or realization occurs. For example, investors who put $100,000 in Ripple shares for $40 each can expect an offer of $60,000 to $75,000 from such buyers.

However, in the secondary market, Ripple shares are closer to $100 and Ripple's final tender offer is $175, so the same investment is worth over $200,000 on paper. Deaton said the offer is usually based on original investments, not on current unrealized profits. This means that the seller may have a great value left behind.

Why is it important for Ripple investors?

Ripple's private equity stocks are not readily accessible to investors. Ripple is only available after the lockup period has expired. This waiting period creates opportunities for companies like Cherokee to intervene and provide liquidity.

The offer offers a rapid cash exit, but if Ripple completes the IPO, there is a discount compared to the potential benefits. Deaton said retention could be a better long-term option, unless investors need the funds urgently.

“The bottom row means Ripple has an IPO and won't win Ripple shares until the lockup period expires. So for a while, we didn't get Ripple shares.