Louis Group Structured Fund Plc (in Liquidation) (“the Fund”)

Louis Group Structured Fund
Plc (in Liquidation) (“the
Fund”)
(IN COURT SUPERVISED LIQUIDATION)
Report of the Liquidators to Creditors and Shareholders
June 2015
Registered office: Unit 33K, First Floor, Snugborough Trading Estate, Union
Mills, IM4 4LH
Introduction
This is a further report as liquidators of Louis Group Structured Fund Plc. (“LGSF” or “the Fund”)
This report follows on from our report dated August 2014 which can be found at the following link:
http://www.pwc.com/im/en/services/advisory/insolvency-louisgroup.jhtml
In addition, we wrote to you in November 2014 to:


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explain in detail our findings and conclusions as regards the circumstances of the Fund;
outline the options available to the Fund; and
seek your views on the way forward.
A clear majority of you supported seeking a compromise.
Compromise
The Fund (and other parties) applied to the Isle of Man Courts in November 2014 and since then:

On 22 December 2014 orders were made by the Isle of Man Court which enabled the Fund
and other relevant parties to enter into a compromise arrangement;

LG Resolution Limited ("LGR") was incorporated on 21 January 2015 for the purposes of
pooling cash into one company and issuing participating shares to those parties accepting the
compromise, including the Fund;

On 23 February 2015 the compromise documents were signed and assets were pooled in LGR;

At the same time, the Fund was issued 4,267,198 shares in LGR.

Shares in the Fund which were owned by LGSPI, were transferred to 20 shareholders who
previously had claims against LGSPI pursuant to PICS contracts. These transfers were part of
the compromise.

On 16 March 2015, LGR paid a distribution of £0.83333 per share, which amounted to
£3,555,984 received by the Fund.
Creditors
The Fund had a number of creditors including professional services firms. All of these creditors’
claims have now either been approved in full or the creditor has subsequently withdrawn their claims
against the Fund.
Shareholder Distribution
When the Fund was suspended in February 2010 there were 260,987.17 participating shares in issue.
There were also 100 management shares in issue, 50 shares held by Louis Group International
(Europe) Limited (in Liquidation), and 50 shares held by LG SP Investments Ltd (in Liquidation).
The main asset of the Fund was loans made to LGSC, totalling £25,777,778. US$2,817,291 and
€1,405,717.
LGSC went into liquidation at the same time as the Fund and was not in any position to repay these
debts.
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As a result of the compromise agreement and the transfer of funds of £3,555,984, the Fund can now
make a return of capital to contributories (shareholders) of around £13.50 per share.
The return of capital requires the approval of the Isle of Man Court, which we have sought and as soon
as we receive approval, the funds will be paid. In addition, we intend to allocate the LGR shares to
Shareholders on a rateable basis.
Financial report
A receipts and payments account for the period 21 January 2013 (commencement of the liquidation)
to 31 May 2015 is attached in Appendix 1.
The main costs have been our time costs to deal with the administration of the Fund in liquidation, in
particular the:
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Investigation of the Fund’s affairs;
Reporting of our findings;
Canvassing your views;
Adjudicating on claims;
Agreeing the compromise terms; and
The maintenance of books of account.
Our time costs have been approved by the Isle of Man Court since the start of our Louis Group
involvement in 2012. All of the fees submitted have been approved.
Other Matters
In light of the substantial losses which the Fund suffered, we have considered whether the Fund may
have claims against third parties, notably those parties involved in its management and direction,
including those who may have acted in a shadow capacity.
In that regard, a claim for breach of director duty has been made by the Fund against LGIOM.
However, under the compromise, the financial benefit of this claim has been assigned to LGR.
This means that in the event that the claim is successful, the proceeds will be paid to LGR and that all
costs in pursuing the claim will be borne by LGR.
Conclusion
The compromise has secured a return of around 13.5p in the £ for Fund investors, with the prospect of
further recovery from the shares in LGR which Fund investors will also receive.
This outcome is far from satisfactory for investors who, in the main, understood the Fund to be a low
risk property backed investment.
However, in the unique circumstances of the Louis Group, it is the best that could be achieved.
The Fund’s affairs will now be wound up.
Gordon Wilson
Joint Liquidator
Louis Group Structured Fund Plc (in Liquidation)
June 2015
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Appendix 1
Louis Group Structured Fund Plc (in Liquidation)
Receipts and Payments from 21 January 2013 to 30 April 2015
Cash balance b/fwd 21 January 2013
Receipts
Interest received
LG Resolution distribution
£
410,416
857
3,555,984
3,556,841
Payments
Bank charges
Liquidation Expense ( PWC)
Pre liq Liquidation Expense ( PWC)
Liquidation Expense ( LGIOM)
Legal and professional fees (DQ)
Pre liq legal and professional fees (DQ)
Other legal & professional fees
Other expenses
319
109,650
25,873
42,081
41,870
17,570
63,562
1,120
302,044
Cash balance c/fwd
3,665,213.31
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