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More bad news for Cash Plus investors

BY PAUL HENRY Crime/Court Desk co-ordinator henryp@jamaicaobserver.com

Monday, October 08, 2012    

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THERE is more bad news for the already disgruntled Cash Plus investors who are owed billions of dollars by the failed alternative investment scheme.

This is in the form of a Court of Appeal ruling which will see a large sum of money that could have gone to investors being paid out in fees and expenses to two former co-interim receiver managers and the auditing firm PricewaterhouseCoopers.

The ruling should not sit well with creditors who, according to court documents, are owed in excess of $26-billion.

Following the ruling, attorney Hugh Wildman, a former Cash Plus liquidator and trustee in bankruptcy, told Radio Jamaica that he would be taking the matter to the UK-based Privy Council, Jamaica's final appellate court.

A total of $286.8 million was owed by Cash Plus to the two men for their management of the assets of the failed company, following its collapse in early 2008, court documents stated. According to court papers, $39.5 million of that sum is for the men's fees.

Additional court documents show that $100 million has so far been paid out, leaving an outstanding amount of $185.8 million.

Wildman in his capacity as Cash Plus liquidator and trustee in bankruptcy, challenged under the Companies Act, the legality of the men's 2008 appointment by the Supreme Court.

He took the matter to the Court of Appeal, where a win would mean that no claim for payment could be made by the men. But with Wildman's loss, Cash Plus will now have to offload assets to make the outstanding payment.

Last week, Wildman told the Jamaica Observer in an interview that the company could not afford to make the payment.

He said that the money could have gone toward making payment to the hundreds of Cash Plus investors, some of whom have filed suit to recover money owed to them.

Cash Plus collapsed in 2008 following a cease and desist notice served in 2007 by the Financial Services Commission and the closure of its accounts by the National Commercial Bank.

In March 2008, a former Cash Plus officer described in court documents as 'Madam', had the High Court appoint the two men to help source Cash Plus assets and manage the affairs of the company so that debts to creditors could be honoured.

Both men were in October 2008 replaced by Wildman, who was appointed liquidator in April of that year. In challenging the men's appointment, Wildman also challenged the close to $300 million in fees and expenses that was approved by the High Court.

The matter was heard in the appellate court in April and judgement reserved then.

On Friday, the Court of Appeal noted that under the relevant provisions of section 213A of the Companies Act and part 51 of the Civil Procedure Rules, the lower court was entitled to appoint the former co-interim receiver managers, although no formal notice was given to Cash Plus.

The court also declared valid the approval of the fees and expenses.

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