The judgment reaffirmed the earlier decision of the UK High Court that it has no jurisdiction to sanction the proposed scheme as it modifies certain rights of clients whose property is held on trust by LBIE.
PwC joint administrator and partner Steven Pearson says: “I am disappointed by this ruling as it restricts the options available to the administrators for the return of client assets and, in particular, the degree of protection afforded to clients who receive assets back from the company.”
PwC recognised the proposed scheme was at risk following the original judgment and has been working with the LBIE creditors’ committee to develop a “credible alternative approach” to return client assets using approximately the same framework of rules and timeline as was contained in the proposed scheme.
It says these alternative proposals were outlined to affected clients during October and will be formally launched in an offer circular in the coming weeks.
It says: “Unlike the proposed scheme, the alternative arrangements will only bind those clients who positively elect to sign-up. In order to benefit from these arrangements it is vital that affected clients take the time to understand what is now being are proposed and, by the end of the year, sign up to their terms.”
GLG, Ramius and Oceanwood Capital have worked with the administrators in developing the alternative proposals.
Administrators are continuing to return assets to clients on a bilateral basis and have returned some £8.14bn to date.