The administrators of “possible Ponzi scheme” Privilege Wealth have filed their latest six-monthly progress report earlier this month.
Since the last update, no further recoveries have been made to date and the total recovered from the scheme remains just under £91,000. Costs of the administration rose to £83,000, with the increase in the period consisting almost entirely of a further £39,000 in legal fees spent on attempting to gain control of Privilege’s assets. The administrators have not received any further fees since the last update, as their fees are fixed at 30% of recoveries.
The most eye-catching item in the progress report is that the administrators now have a figure for the potential value of the Rosebud lending loan book, a portfolio of payday loans to members of the Sioux Indian tribe of South Dakota.
The administrators believe the book’s value is between 1 and 4% of the value that Privilege paid for it of c. $25 million – so in other words, between $250,000 and $1 million. Minus any further fees involved in selling the book and, from the perspective of Privilege investors, minus the administrators’ 30% cut of anything left after that.
Prospect of significant recoveries for the investors who are owed an estimated total of £45 million therefore appear to remain highly uncertain.
The administrators have engaged specialist brokers in the US to sell the Rosebud book but no sale has been concluded at this time.
The position regarding Helix’s claims over Privilege’s assets remains under review.
A number of other assets are listed by the administrators but are not expected to result in substantial recoveries.
In regard to the insurance policy mentioned in the last update, the position remains under review. The administrators believe Privilege Wealth plc is a beneficiary of the insurance policy but have been refused details of the claim made on this policy by ex-Privilege director Peter Stokes, on the grounds that they are not a party to the claim.
The administrators continue to leave open the question of whether they should attempt to enforce the judgment granted to Privilege against OffshoreWealth’s David Marchant for calling Privilege a fraud, having themselves described Privilege as “possibly operated as a Ponzi scheme” when they were appointed.