The Financial Services Compensation Scheme may be able to retrieve some of the money it paid out after an investment in a Caribbean resort failed.
The lifeboat fund has struck a provisional settlement with the new owner of a Sipp provider involved in the scheme, Law360 reports.
London’s High Court has put six separate lawsuits the scheme launched against Guernsey-based Estera Corporate Trustees on hold.
The FSCS was taking legal action to claw back at least £1m it paid to investors who backed a resort development project on the island of St. Lucia.
Master Matthew Marsh has given the both sides until August 1 to finalise the settlement agreement, according to Law360.
At the beginning of month, Estera settled with administrators Hartley Pensions in a £5.9m case, in which Hartley had sued Heritage Corporate Trustees – which Estera acquired in 2017 – on behalf of its 169 members of negligence and breach of duty.
The agreement would see Hartley drop the allegations in exchange for money for compensation. Estera is also being sued by a group of investors for mishandling their money.
The lawsuits are centered around “fractional ownership purchase” of a St. Lucia island hotel development project, known as Freedom Bay, which would see investors entitled to percentage of rental income, or to staying in the villas for part of the year.
Both the FSCS and a group of investors claim that only a few of the villas were constructed.
The funds were invested through Sipps, administered by Heritage Corporate Trustees, which was later acquired by Estera.
Although Estera is a legal successor to Heritage, the case predates its acquisition.
The FSCS said it is too early to comment due to the pause in the case. Estera did not immediately respond to requests for comment.