The Isle of Man-domiciled collapsed funds were managed and promoted by Premier Group, an environmentally-focused fund that was wound up by the IoM authorities last year, for which the crown dependency’s taxpayers will ultimately have to foot the winding up bill picked up by the Isle of Man financial regulator (IoMFSA).
The group of funds invested in the development and ownership of recycling facilities in the UK. It included the New Earth Recycling and Renewable (NERR) and two feeder funds, the Premier Investment Opportunities Fund and the Eclipse Investment Fund.
The funds had some 3,249 investors who put £292m ($378m, €328m), the majority of whom fear they will lose all or a significant part of their money.
A letter from the liquidator
Deloitte’s joint liquidator Alex Adam wrote an update for NERR in a letter to creditors and investors explaining that a distribution of £364,967 had been received from the administrators of New Earth Solutions Group Limited, a UK trading entity part of the Premier Group in which NERR owned a majority stake, reports local newspaper Isle of Man Today.
This distribution was intended as a first and final dividend payment of 1.5p to all unsecured creditors, the update said.
However, as the costs of the liquidation to-date already exceed £365,000, the receipt of the dividend will not result in a distribution to NERR’s creditors or shareholders, it added.
Adam’s investigations into NERR, according to his report, are focusing on specific issues where the liquidators believe a claim could be brought against third parties.
“We still believe that any substantial recovery will depend on identifying and then successfully pursuing claims against third parties,” Adam wrote.
“However, we do not wish to prejudice any potential claim by providing further detail at this stage,” Adam added. “Whilst we are focusing on those issues which we have identified as having the greatest prospects of success, we have not discounted other possible claims.”
Footing the bill
To meet the costs of the liquidation, the IoMFSA is providing funding by way of a non-recourse loan to the joint liquidators.
However, this funding arrangement is subject to continuous review and can potentially be withdrawn at short notice.
“At the present time the Isle of Man Financial Services Authority are continuing to facilitate the funding of the liquidation on public interest grounds,” Adam wrote.
“As noted previously, this funding can be withdrawn at any time,” he added.
Busy times at the IoMFSA
Last May, IoMFSA announced it would be conducting an inquiry into collective investment funds following a series of failures – including those linked to the Premier Group, which the regulator has confirmed it is “actively reviewing” – by setting out “effective” guidance rules to “safeguard the reputation of the island”.
Another fund linked to the Premier Group, the Eco-Resources Fund, is also being wound up. It went into liquidation last November after the Premier Group cited a “lack of liquidity”.
