Statement re : Liquidation of AllBlue Funds

RNS Number : 0239U

Highbridge Multi-Strategy Fd Ltd £

26 March 2019

 

HIGHBRIDGE MULTI-STRATEGY FUND LIMITED (the "Company")

Liquidation of the AllBlue Funds

The Company announces that it has received a communication from the Liquidators of AllBlue Limited and AllBlue Leveraged Feeder Limited (together, the "AllBlue Funds") regarding the liquidation of the AllBlue Funds, the relevant sections of which are extracted below.

Until February 2016, the Company's investment objective was to invest substantially all of its assets into the AllBlue Funds. To date, the Company has received a total of £711.2 million and $42.6 million from the AllBlue Funds, representing approximately 99.4% of the value of the Company's investment in the Sterling classes of the AllBlue Funds and approximately 99.4% of the value of its investment in the US$ classes of the AllBlue Funds and these proceeds have been paid to creditors and invested for the benefit of continuing shareholders on a pro rata basis*. The Company currently remains a creditor of the AllBlue Funds of £4.5 million in aggregate.

*In addition to any funds due to be received from the AllBlue Funds, a very small residual cash amount remains due to cash exit creditors and tender creditors due to previous distributions paid being rounded amounts.

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RE: AllBlue Limited - in Voluntary Liquidation

Dear Investor,

We refer to the Liquidators' introduction letter dated August 17, 2018 (the "Introduction Letter"), in respect to the commencement of the voluntary liquidation of the Company on July 11, 2018 (the "Date of Winding Up"), and the appointment of Stuart Sybersma and Michael Penner of Deloitte & Touche, Cayman Islands, as joint voluntary liquidators (the "Liquidators").  

Following the Date of Winding Up, the Liquidators' have attended to the ongoing affairs of the Company, which broadly speaking includes winding down and realizing assets, settling liabilities, managing service provider relationships, addressing queries and requests of the investors, and attending to other statutory and best practice liquidation procedures.

The purpose of this letter is to provide an update to the investors on the key activities and status of the liquidation to date.

Assets of the Company

As detailed in the Introduction Letter, the primary assets of the Company include a residual cash holding reserved for the expenses that arise during the liquidation period, and the Company's remaining investment in the relevant feeder funds (all in voluntary liquidation) (the "Feeder Funds") that are invested in the following underlying master funds: BlueCrest Capital International Master Fund Limited - in Voluntary Liquidation ("BCI"), BlueCrest Multi Strategy Credit Master Fund Limited - in Voluntary Liquidation ("MSC"), and BlueCrest Mercantile Master Fund Limited - in Voluntary Liquidation ("Mercantile" and referred to collectively herein with BCI and MSC as the "Master Funds"). The Feeder Funds and the Master Funds are Cayman Islands exempted companies, and Messrs. Sybersma and Penner have also been appointed as joint voluntary liquidators of the Feeder Funds and the Master Funds.[1]

The sections below include an update on the assets of the Company. For further information, please refer to the last issued audited financial statements of the Company.

Investment in the Master Funds

BCI continues to hold a residual investment portfolio, including debt, equity, and warrants held in various private companies. Since the Date of Winding Up, BCI has received proceeds of $1.7 million from the disposition of two positions.

The remaining positions are held at zero value, and while the Liquidators will monitor and attempt to maximize the value realized (if any) on the positions during the liquidation period, the potential for significant future recoveries is unlikely.

The last remaining investment of MSC is a fully funded bond position (the "FSL Notes") that was subject to a tender offer process as of the Date of Winding Up. Due to ongoing legal disputes involving the buyer under the tender process, the issuer of the bond position and other related parties, the realization of the bond through the tender process remains pending and there is a high degree of uncertainty that the sale of the bond through the tender process will complete. The Liquidators are seeking advice on the alternatives available to the Master Fund in respect to the FSL Notes, and will provide further information in a future update to the investors.

The Liquidators expect to complete the liquidations of Mercantile and its Feeder Fund in the second quarter of 2019. Mercantile holds a small residual cash holding, and the balance remaining at the conclusion of the liquidation will be distributed to its Feeder Fund and result in a distribution to the Company in the second quarter of 2019.

Legal claims

In addition, certain of the Master Funds and a Feeder Fund hold related legal claims (the "Claims") that are being pursued jointly with a number of other claimants against various banks. The Claims are in respect to allegations that the banks colluded to manipulate the foreign exchange markets between 2003 and 2013 causing damages to the claimants.

Two separate complaints have been filed, one in New York on November 7, 2018, and the second in London on December 31, 2018.[2]

The pursuit of the Claims is expected to take an extended period of time and there is currently no reliable timeline as to when this will be concluded. Available estimates of the potential recoveries vary depending on the assumptions applied, and while there is potential for significant recoveries, it is possible that no recoveries will ultimately be achieved. Due to the sensitive and confidential nature of this matter, no further information can be disclosed at this time.

Distributions

The Liquidators anticipate executing an interim distribution to the investors of the Company in the second quarter of 2019, however, the exact timing of the distributions is currently unknown. This is because the payment templates previously utilized by the administrator to effect the distributions to the investors prior to the Date of Winding Up are not available to the Liquidators, so the Liquidators have been working with the administrator and the remitting bank to implement a process for executing the distributions in an efficient manner at limited cost.

Although the development and implementation of the distribution process is taking longer than expected and is outside of the Liquidators' control, it is necessary for the administrator and remitting bank to establish the distribution process before the distributions can be instructed. The Liquidators note that this is expected to assist with the efficient and timely payment of this and any future distributions (if applicable).  

The Liquidators estimate the distribution will approximate 24%[3] of the June 30, 2018 net value of the Company (representing the final net value calculated for the Company that was reported to the investors prior to the Date of Winding Up). However, please note that the estimated distribution is subject to change for developments occurring between the date of this letter and the date of the distribution.

Once the distribution process is established, the Liquidators will declare a distribution on behalf of the Company and will send advance notice to the investors regarding the timing of the payment.

Note that the distribution declared by the Company (and any future distributions, if applicable) will be paid to the investors pari passu based on their interest in the Company as of the Date of Winding Up.

Liquidation timeline and future distributions 

The completion of the liquidation and future distributions (in addition to the distribution identified above) are dependent upon the successful realization of the remaining assets held by the Master Funds. Due to the uncertainties surrounding the assets, there is currently no estimate of the timing or amount of potential future distributions (if any), or the expected timing of the conclusion of the liquidations.

Final audits

The final audit of the Company was completed for the period January 1, 2018 to July 31, 2018, and an unqualified opinion was issued on November 16, 2018. Note that no further audits will be completed for the Company during the liquidation period.

Future reporting

As identified in the Introduction Letter, the net value of the Company is not being calculated by the Liquidators and investor account statements are not being provided during the liquidation period. Thus, the June 30, 2018 account statement represents the last monthly account statement that is available to the investors.

The Liquidators intend on providing investors with updates on the progress of the liquidation on a semi-annual basis. The next update will be the Liquidators' first report with respect to their conduct of the liquidation and the state of the Company's affairs.

The Liquidators' first report will be issued by October 2019.

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For further information about this announcement contact:

JTC Fund Solutions (Guernsey) Limited Secretary

Tel: [phone]

E&OE - in transmission

 

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[1] References to the Liquidators in this letter should be read to refer to the Liquidators of the Company, the Master Funds, or the Feeder Funds that is relevant in the context of the information being disclosed. 

[2] Multi-billion forex antitrust claims provide New Year bite (Global Legal Group Ltd.: January 9, 2019) https://www.cdr-news.com/categories/disputes/8940-multi-billion-forex-antitrust-claims-provide-new-year-bite  

[3] The estimated distribution has been presented as a percentage of the June 30, 2018 net value for illustrative purposes only, so that investors can calculate their estimated pro rata share of the distribution using the June 30, 2018 account statements. For the avoidance of doubt, the investors should not expect future distributions of a value equivalent to the June 30, 2018 net value, as the amount of distributions paid during the liquidation period may be significantly less (or greater) in value and cannot be accurately predicted at this time. 

 

END

 

 

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