As reported earlier this week, Cayman Islands’ judge the Honourable Mr. Justice Foster QC, granted an order appointing Grant Thornton as receivers for the Axiom Legal Financing Fund. In so doing, Justice Foster rejected a proposal by City Equities to take over the running of the Fund in a bid to trade out of its current difficulties – a proposal which was opposed both by the Fund’s directors and by the Cayman Regulator, CIMA, due to perceived conflicts of interest.
The City Equities proposal had aroused a great deal of suspicion from investors due to the fact that it is under common ownership with Tangerine Investment Management (“Tangerine”), the Fund’s former investment manager, which was sacked when the Fund’s many problems came to light.
The Fund’s directors supported the appointment of Grant Thornton following shareholder preference, despite having initially preferred the appointment of KPMG.
Justice Foster also ordered that Tangerine must pay 60% of the Fund’s costs of the receivership application.
And so it seems that the wheels are set for the winding up of the troubled Fund. It remains to be seen how much can be salvaged for the investors who backed it, and whether any action will be taken against those responsible for its demise.
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