Foundations Program plc - in liquidation
FPA Limited - in liquidation

It had been anticipated that the Joint Liquidators would be in a position to make meaningful updates available on this site. As shall be explained in a little more detail, the uncertainties previously recognised in several aspects of the liquidation have proved, if anything, to be worse than originally thought. To the extent that outcomes cannot be predicted definitively, the Joint Liquidators have been reluctant to comment where any possible conclusion can only be based on speculation. Nonetheless it is appreciated that the creditors of the Program wish to be informed of the current position.

Participant obligations

As anticipated, the accuracy of the holdings and valuations of the life policies and other assigned asset is extremely variable. The basis of allocating the share of losses is dependent upon monthly valuations and inaccuracies have an impact on all Participants.

The underlying investments cover some 1500 lines and tracking is required over a period of up to 5 years - a matrix of 90,000 valuation points. In turn they need to be allocated across almost 200 policies.

All life companies have been approached for historical data, but regrettably those who have responded to date have only been able to provide paper records. The cost of manually rectifying all administration records will be significant and the cost/benefit is not clear.

We are currently reassessing the differences between the current valuations recorded on the system and those provided by the life companies to assess whether it will be possible to reduce the re-creation of records for only those that display a significant variance. No conclusion on the final allocation of points (which will lead to loss allocation) has, therefore, yet been reached.

Program assets

The remaining significant asset is an asset for which there is limited liquidity. It is not appropriate to make any other statement regarding the realisation process at this time.

Loan Note Holders

The Loan Note claims are considered under two headings. The first assessment is whether or not the claim is a valid claim against FPA Limited or, in the alternative, a claim by these investors solely against Mr Brewer, who sold the notes, allegedly fraudulently.

The second assessment is whether or not the claims, if valid against FPA Limited, can be met by the assets within the life policies, once these have been released by the bank, or whether the Participants have superior legal rights to those assets. Whilst these matters are not mutually exclusive, they should be assessed against the whole backdrop of the Foundations Program.

The Joint Liquidators will be seeking Counsel's Opinion on the complex issues. No decisions relating to the Loan Note claims will be made before that Opinion has been received.

The Joint Liquidators will update this site by the end of November in advance of the next formal creditors' meeting.