Thursday deadline date for LM fund
The future of the embattled LM Investment Fund which many New Zealanders have money in is set to be decided on Thursday.
Tuesday, July 30th 2013, 6:00AM
A meeting has been called for this Thursday for LM’s creditors – at which the administrators are to ask for the company to be liquidated.
They have indicated there may not be much left in the coffers for unsecured creditors.
FTI Consulting has been at the helm of LM since March. It was in court this month fighting to remain the responsible entity of the First Mortgage Income Fund, which regulator ASIC wanted PricewaterhouseCoopers to take over and wind up.
Trilogy, representing the fund’s New Zealand investors, also wanted to be the responsible entity. The judge reserved her decision.
Now, FTI says it has become aware that some stakeholders have queried the possibility of a conflict arising when FTI administrators adjudicate on claims between creditors and fund claims against the company when the administrators represent both the fund and the company.
It said, because of that, it wanted David Clout and Associates to step in to wind up LM.
Creditors will be asked whether they want this to happen or would rather the administration ended. Creditors had to have lodged proofs of debt by July 25 to be able to vote.
The estimated dividend to unsecured creditors is unknown. FTI said: “We anticipate a dividend to unsecured creditors will be unlikely unless successful recoveries are made in relation to related party debtors and/or voidable transactions. Creditors should also note the significant amount owing to priority creditors of the company in relation to outstanding employee entitlements and superannuation.”
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