What is the status of the Fund’s liquidation?
Information in relation to interim distributions made by the Fund to date and potential future distributions is set out below.
The Fund is party to ongoing litigation which may have an impact on further recoveries, including prosecuting claims against its former administrator and custodian. The Fund is also party to proceedings against Herald Fund SPC (in official liquidation) (Herald), the Cayman-domiciled investment fund in which the Fund has an interest as both a creditor and shareholder.
For further details concerning ongoing litigation, and the status of the Fund’s liquidation more generally, kindly refer to previous stakeholder reports (see the ‘Creditor and Investor Information’ section).
What distributions have been made to-date and what are the prospects of future distributions?
The Fund has made an interim distribution to admitted Ordinary Creditors and admitted Redemption Creditors (defined below) in respect of their principal claims. For further details, kindly refer to the stakeholder reports.
A recent ruling by the Grand Court of the Cayman Islands (Grand Court) has clarified the position in relation to payment of statutory interest on the above claims. The liquidators are currently considering the implications of that ruling for the Fund’s estate and future distributions.
At this stage, primarily due to uncertainty as to the amount of further recoveries and ongoing litigation in relation to the method and manner in which the Fund will be required to make distributions to investors, the liquidators are unable to advise as to the timing, or prospects, of making a distribution to the Fund’s Equity Claimants (i.e. investors with claims in respect of their unredeemed shareholding in the Fund). Equity Claimants will be updated as and when the position becomes clearer.
Who is an Ordinary Creditor?
Ordinary Creditors are unsecured creditors whose principal claims rank ahead of the Redemption Creditors in accordance with the statutory order of priority as confirmed by the Privy Council in recent Herald-related liquidation. Included within the class of Ordinary Creditors are January Subscribers (defined below).
Who is a January Subscriber?
January Subscribers are certain prospective investors who submitted subscription requests to the Fund for a trade date of 1 January 2009, but were never issued shares in respect of those subscriptions due to the suspension of subscriptions into the Fund and its eventual liquidation. Claims by January Subscribers fall to be treated in the same way as those of Ordinary Creditors.
Who is a December Subscriber?
December Subscribers are investors who submitted subscription requests to the Fund for a trade date of 1 December 2008 and are eligible to be recognised as investors on the Fund’s share register as their subscription payments were not rejected by the Fund’s directors within the prescribed deadline.
The liquidators intend to rectify the Fund’s share register so that the December Subscribers are entered on the Fund’s share register. The rectification process will occur at the conclusion of the ongoing litigation concerning distribution methodology and once a distribution is expected to be made to the Fund’s Equity Claimants.
Who is a Redemption Creditor?
Redemption Creditors are those creditors who have sums due to them in their capacity as former shareholders of the Fund in relation to their unpaid redemptions. They are comprised of December Redeemers and KYC Redeemers, defined below:
- December Redeemers are investors whose shares were redeemed pursuant to the Fund’s articles (Articles) with a trade date of 1 December 2008, but did not receive redemption proceeds at the time.
- KYC Redeemers are investors who made redemption requests pursuant to the Articles on or prior to 1 December 2008, but did not receive redemption proceeds at the time due to there being outstanding “Know Your Client” and/or other documentation.
Who is an Equity Claimant?
Equity Claimants are investors of record with claims in respect of their unredeemed shareholding in the Fund. Please see the below FAQ as to the distinction between investors of record and beneficial owners.
How does the Fund distinguish between investors of record and beneficial owners?
An investor of record is the investor noted on the Fund’s share register as the legal owner of the relevant shares. A beneficial owner is a person who has an underlying interest in the Fund’s shares, but is not listed as the investor of record in respect of such shares.
The liquidators only hold information on, and will therefore only communicate with, investors of record. The liquidators are only permitted to make distributions to investors of record, subject to any Court approved share transfers and/or authorised assignments (see below FAQs on these points).
If you are a beneficial owner, your custodian or nominee shareholding institution (i.e. the investor of record) will be responsible for circulating the liquidators’ updates and forwarding any distributions to you. A beneficial owner wishing to obtain copies of the liquidators’ stakeholder reports and attend the stakeholder meetings may do so subject to authorisation being granted by the investor of record (please see FAQs below for further details).
Are the liquidators able to confirm or provide a statement in relation to my investment in the Fund?
Only investors of record of the Fund can request a shareholding statement or confirmation of shares held, by contacting the contact person listed on the Contact section of this website. The liquidators do not produce statements and therefore statements as at 12 December 2008 will only be provided on request to authorised parties. The statement has been obtained from the Fund’s pre-liquidation books and records and accordingly the liquidators do not provide any warranties or guarantees as to the statements. If you are a beneficial owner, please liaise with your custodian or nominee institution to obtain your statement as the liquidators are not privy to beneficial owners’ information.
Do I need to file a claim to be eligible for a distribution?
Equity claimants (defined above) are not required to file claim forms (also known as proof of debt forms).
Ordinary Creditors, January Subscribers and Redemption Creditors (all defined above) may submit claim forms to the Fund’s liquidators. Any such claimants who have not filed a claim with the Fund are encouraged to do so.
A claim form can be downloaded from the Forms section of this website.
Can I receive copies of the liquidators’ stakeholder reports and attend the stakeholder meetings convened by the liquidators?
Investors of record are eligible to receive the stakeholders’ reports and attend the stakeholders’ meetings. Beneficial owners are only eligible to receive the stakeholders’ reports and attend the stakeholders’ meetings if their investor of record has provided the liquidators with written authority for them to do so.
If you are a beneficial owner, please request your financial institution to liaise with the contact person listed at the Contact section of this website should you wish to attend stakeholder meetings as a proxyholder or obtain copies of the reports.
I am an investor of record in the Fund. Can I transfer / sell my investment to another party?
Under the Companies Law (2018 Revision) (the Companies Law) any re-registration or transfer of shares in a company in liquidation will be void unless approval is granted by the Grand Court.
Accordingly, if you are an investor of record and wish to transfer your shares to another party, this will require an application being made to the Grand Court. The cost of making such an application to the Grand Court is approximately US$8,000 to US$10,000 and would need to be met by the investor in question.
Please contact the contact person listed at the Contact section of this website should you wish to learn more. Please note that this does not constitute legal or professional advice and the liquidators do not accept any liability in connection with any share transfers.
I am an investor of record in the Fund. Can I assign / sell my rights to receive a distribution to another party?
You may do so, subject to consent from the liquidators. Please contact the contact person listed at the Contact section of this website to learn more. If you are a beneficial owner, the sale / assignment of your rights is not within the purview of the liquidators and you should liaise directly with your custodian or nominee institution.
This FAQ section has been prepared solely for general information purposes. It is not intended to be, nor is it, legal advice. The liquidators do not provide any warranties in relation to the same. All investors should obtain their own legal advice in respect of their investment in the Fund. Please contact the contact person listed at the Contact section of this website should you have any questions.