12 February 2015
John J. Greenwood and Hadley J. Chilton were appointed as Joint Liquidators (the “Liquidators”) of Tranen Capital Alternative Investment Fund Limited (the “Fund”) pursuant to an Order of the Eastern Caribbean Supreme Court in the High Court of Justice in the British Virgin Islands, which took effect on 23 July 2014. The Fund, its investment manager, Kenneth Landgaard and Arthur Bowen (being former directors of the Fund and its investment manager) and certain service providers to the Fund and related parties including Brock Bagley, Randy Bagley, the Leo Group LLC and Donald Trudeau have been parties to various lawsuits in the United States of America, with creditors and former service providers alleging a variety of irregularities in relation to the Fund, its management and its affairs.
Pursuant to an Order of the United States District Court, Southern District of Indiana, issued on 15 January 2014, a settlement agreement against the Fund and related parties was granted and control of the Fund was transferred to an independent recovery company, Delta Group Limited (“Delta”).
As a result of that appointment, Delta engaged with certain service providers to the Fund, in order to obtain the Fund’s books and records and allow forensic analysis to be undertaken. That forensic analysis indicated that the Fund was insolvent and a liquidator should be appointed.
The Liquidators are liaising with stakeholders as part of their investigations and are discussing options with respect to both recovering the assets of the Fund and potential litigation.
The BVI insolvency proceedings have conferred a statutory moratorium on claims against the Fund. The liquidation proceedings are of universal effect and are designed to provide the most efficient and equitable mechanism for recovering the Fund’s assets and prosecuting appropriate litigation in order to swell the liquidation estate for the benefit of the creditors’ and investors. The object of the winding up court order in dealing with an international insolvency is to ensure, so far as it properly can, that the world-wide assets of the Fund and the world-wide claimants to those assets are treated on a common basis.
Stakeholders who are considering taking action in respect of the activities and assets of the Fund and its management or who have information which is useful or pertinent in that regard are encouraged to contact the Liquidators directly. The Liquidators are aware of parties considering certain derivative proceedings; however, many of the recovery activities and potential causes of action will be proprietary to the Fund, which now acts by the Court-appointed Liquidators, as the privity of contract (with the rights and obligations) or transaction counterparties will be between the Fund and those service providers or other potential litigants. Third parties may face substantial procedural and jurisdictional deficiencies as well as limitation to the scope of actions they might bring in attempting to pursue derivative litigation when the underlying claims would be more properly brought by the Fund itself. Notwithstanding that it represents an inefficient application of stakeholder resources, there is a real risk that such flawed, convoluted or fragmented strategies may also impede or adversely affect the Fund’s own recovery activities.
Investors should also note that various courses of action are available to a liquidator, which are not available to creditors or investors directly. Not least, the Liquidators have all of the investigatory powers enshrined in the BVI Insolvency Act, 2003 and, as officers of the BVI High Court, the Liquidators and acts of the BVI Court may be recognised globally giving the Liquidators wide reach in pursuing investigations and recovery actions on behalf of the Fund.
The Liquidators have relationships globally with a network of specialist advisors and regulators and will be able to leverage their considerable experience to the benefit of the Fund. The Liquidators are liaising with former service providers to the Fund and any other parties who have been engaged in recovery activity in respect of interests in the Fund in order to maximise the liquidation estate for the benefit of its creditors and shareholders.
If you have not submitted your creditor claim or shareholder interest to the Liquidators, or should you wish to discuss the affairs of the Fund and the former management and services providers, please contact the Liquidators at email@example.com.