The saga of Privilege Wealth has all but come to an end, as the administrators of the collapsed minibond scheme have filed their final report, before handing the last of the clean-up to the Official Receiver.
Readers and investors will probably be unsurprised that the outcome was 100% losses for investors, despite Privilege Wealth's claims that its bonds were "low-risk" and "insured".
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.
In October 2018 the director of Munio Capital attempted to have the company voluntarily struck off the register, which would have resulted in the company being dissolved and its assets (if any) forfeited to the UK Government.
That attempt failed after Companies House received an objection, most likely from a creditor. Having failed to get rid of the company, the sole director, Gary Williamson, has at last filed a set of accounts for July 2017, 10 months late.
The directors of Munio Capital, which in 2016 offered five-year unregulated bonds paying 9.8% per annum, have applied to strike the company off the register.
Munio is six months overdue with its accounts and recently survived a compulsory strike-off in July 2018. That strike-off attempt was launched by Companies House due to the company's failure to file a confirmation statement; this latest strike-off has been requested by the directors themselves, specifically director and joint-owner Gary Williamson.
The administrators of the collapsed unregulated bond scheme Privilege Wealth have filed the first of their six-monthly updates.
The full administrator's report can be viewed on Companies House.
Readers will recall that one of Privilege's main underlying investments was the loan book of a company called Rosebud which extended payday loans to the Sioux Indian Tribe of South Dakota. Since the administrators' initial report, the administrators have succeeded in recovering $87,000 from a Rosebud escrow account (£63,000).
Some further small sums recovered from various parties bring the total funds recovered from Privelege to £91,000. The administrators are due 30% of all recoveries, and this plus legal and other costs take the net amount recovered to £51,000. With Privilege's Wealth's debts identified as £4.2 million, clearly this will not go far among the creditors.
The administrators of the collapsed Privilege Wealth investment scheme, which offered unregulated bonds paying 9.85% per year, have filed a Notice of Administrator's Proposals with Companies House on 23 March.
A detailed breakdown of the reasons for the company's collapse can be found in the full administrator's report, but here is the executive summary: Privilege Wealth invested investors' money in a Panamanian pay day loan company run by a man wanted by Interpol (who was later shot), as well as other pay day loan books run by Rosebud Lending, a Sioux Indian sovereign nation lender, and a company called The Oliphaunt Group. None of these investments paid a return.
With running costs of $550,000 a month, described as "rental and payroll" (so presumably this does not include the 9.85% per annum that Privilege had promised to investors), collapse was inevitable. Continue reading...
Privilege Wealth offered unregulated corporate loan note investments paying 9.85% per annum for a term of three or five years (based on an archived version of privilegewealthlp.com from March 2016). It described these as "low-risk, insured notes". Investors' money was to be used to fund payday loans in the United States.
Privilege Wealth PLC has now collapsed and entered administration, with Stephen Katz of David Rubin & Partners appointed as administrator. A statement of affairs was filed with Companies House on 26 February 2018.