Secured Energy Bonds administrator seeks £5.6 million from the ashes of Independent Portfolio Managers

The administrators of Secured Energy Bonds have posted their latest six monthly update, which can be read in full on Companies House.

So far the administration has realised £288,579 in assets, of which £272,905 has been paid out in administration costs, predominantly the administrators’ own fees and the fees of their legal advisors (and VAT). According to a schedule in Appendix B, a further £169,842 has been incurred in legal fees to date but not yet paid out. Bondholders’ claims stand at £7.5 million.

SEB still owns 13,959,588 shares in BlueNRGY Limited, which has been attempting to gain readmission to the NASDAQ stockmarket for some years. BlueNRGY is now apparently undergoing yet another restructuring and whether its listing will be successful is unknown.

The administrators and their legal advisors Bird & Bird have identified a £5.6 million legal claim against Independent Portfolio Managers, who approved SEB’s literature and acted as a Security Trustee – and have been ordered to compensate SEB investors by the Financial Ombudsman.

A letter before action was sent by the administrators to IPM in November 2017. IPM responded to say they disputed the claim and didn’t have any insurance to pay it anyway.

The administrators therefore elected not to go to court and instead issued winding up proceedings against IPM, as a consequence of which IPM was put into liquidation about a week ago.

According to IPM’s last accounts filed March 2016, IPM had only £128,475 in net assets. As for how much is left nearly three years later, who knows, although the liquidators will eventually find out.

In addition, there is the small matter of SEB investors who have claims against IPM in their own right thanks to the Ombudsman awards – and also the Providence Bond investors who have similar claims. In theory, these would rank alongside SEB’s claim against whatever assets IPM has. Even if SEB and Providence investors are compensated by the Financial Services Compensation Scheme, when the FSCS compensates an investor the FSCS often takes their place as creditor of the collapsed company.

Although anything recovered by SEB from IPM could in theory pass to the bondholders, if you look at the legal costs incurred to date, the chances appear high that any recoveries will be swallowed up in legal costs.

Let the follically-challenged fight over a comb commence…

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