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Michael Simpson, partner of PricewaterhouseCoopers (PWC), has been appointed full-time liquidator of Shepherds' four funds domiciled in the Isle of Man in an attempt to retrieve as many assets as possible for investors. You may recall previous bulletins we have covered detailing the plight of this fund and other similar Traded Life Policy investments in particular Mutual Benefits Corporation (MBC) whose license was suspended in May 04 by the SEC. Unfortunately, these funds were widely sold throughout the GCC.
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Simpson, who has been provisional liquidator since May, has been attempting to retrieve as many assets as possible from the Shepherds Select, Safeguard High Security, Traded Life Policy (TLP) and Traded Endowment Policies (Tep) funds to return to investors. The Select fund invested in the TLP and Tep funds depending on the share class chosen by investors. The Safeguard High Security fund invested in the TLP fund. The TLP fund was suspended in May 2004 after the US Securities and Exchange Commission placed Mutual Benefits Corporation (MBC) into receivership and suspended its licence. The TLP bought at least 85% of its traded life policies through MBC. The Tep fund was closed in September 2004. Shepherds said that at $4m, it was not economical for it to continue to manage the fund.
Simpson said he is close to accumulating £2m of assets from the Tep fund. He added: "We expect to have wrapped up the Tep fund soon. Some investors have got frustrated because they see we have accumulated assets but we need to finish this process and then get a petition for the court to agree to distributions. "Simpson said the process of retrieving assets from the other three funds has been slower. He estimated around £40m had been invested into these portfolios.
"Part of the problem has been the lack of information about the policies owned by Shepherds TLP," said Simpson. "The receiver, however, has been pressed by the court in Florida to provide more information, which should include which part policies we own, whether other investors want to buy or sell them and whether any policies have matured. We have received £6.5m so far and, if some policies have matured, we will get more assets." Simpson said he cannot return this £6.5m as "it is possible the life assured will live longer than expected, so we will need the assets to pay premiums in the future".
He added: "I am concerned there have been allegations of fraudulent policies and medicals in the past. This would have produced over-optimistic life expectancy from an investor's point of view. This all means we cannot be certain of the exact value of policies until they have all matured, which is when the life assured has died. "We may also need assets in case we want to join legal action in the US if we believe it will be to the benefit of investors."
For the latest communiqué from PWC on this matter, please contact us accordingly.
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