CHP 11/0097 - Foundations Program Plc (in liquidation) ("FPP")
CHP 11/0098 - FPA Limited (in liquidation) ("FPA")
Update 6 June 2016
Glossary
Foundations Program plc - in liquidation ("FPP")
FPA Limited - in liquidation ("FPA")
Joint Liquidators and Joint Official Receivers ("JL&JORs")
Note for Participants and Loan Note Holders (LNHs) and other creditors of FPP & FPA
Update in respect of the first interim distribution
The JL&JORs have exchanged further correspondence with the representatives of the dissenting Participant in respect of their objection to the distribution methodology. The JL&JORs note with regret that the Participant has declined to consent to the methodology proposed by the JL&JORs.
In essence the difference between the parties is as follows:
- The JL&JORs have concluded that the losses of the Program should be recovered from the Participants' Assigned Assets in accordance with the Participation Points accumulated during the life of the Program and that such losses should be deducted from the Assigned Asset value as at 23 November 2011. The net value of the Assigned Assets should form the basis for distributions from the remaining assets held by FPA.
- The Participant asserts that the terms of the Program cease to have effect as at the date of the liquidation and that all creditors should rank for a distribution in the assets of FPA pari passu based on the value of the Assigned Assets at 23 November 2011
The practical difference in approach is that following the dissenting Participant’s proposal would likely result in those Participants who entered the Program earlier will tend to bear a lower proportion of losses than they would by virtue of their Participation Points under the JL&JORs proposals. Conversely those entering the Program later would likely bear a greater share of the losses under the dissenting Participant’s proposal.
This difference in approach will likely affect all Participants and LNHs recoveries. As the differences in approach would result in significant differences in recovery for all parties, it is not possible for the JL&JORs to make an interim distribution prior to obtaining a definitive ruling on this matter.
The JL&JORs will therefore now take steps to seek the directions of the Court to resolve the issue. As part of the application the JL&JORs will seek directions as to how interested parties should be notified and, if they so wish, arrange to be represented (the “Notice Directions”).
A full description of the Notice Directions will be posted on the website in due course.
6 June 2016