Fiduciaries Experience

Here are summaries of some of the recent engagements where the directors of FFP have been engaged.

Restructuring and transition of underperforming onshore and offshore complex fund structure

At the request of investors we were appointed as independent director to the board of an illiquid $300m asset based lending fund. Redemptions had been suspended during the financial crisis with little in way of realisations made since then. Investors had lost confidence in the investment manager’s valuations, realisation strategies and capabilities and the decision was taken to replace the manager. The independent directors took control of the board, restructured the fund with investor consent and passed control to a new manager who specialised in managing orphan assets. Complex negotiations took place surrounding indemnity scope and survival, transition terms and arrangements, resolution of potential conflicts of interests and investment parameters. Subsequently the parallel onshore fund was also restructured with the appointment of a new GP controlled by the independent directors to oversee the continuing wind down. In all, over 40 entities in the Cayman Islands, US, South America, Europe and the Far East were transitioned, including debt, equity, warrant and participation instruments. Investors were compulsorily redeemed and provided with interests in the liquidating entity.

Replacing conflicted directors in a complex multi-party, cross jurisdictional dispute and instigated settlement

We were appointed at short notice to replace existing independent directors of an investment manager entity that was embroiled in litigation involving competing and cross claims following a major dispute between two groups of shareholders. Allegations of unlawful conduct were made against various parties connected with the group including multiple breaches of fiduciary duties, conspiracy, fraud, theft, dishonesty, conflicts of interest and a multitude of contractual breaches. Damages sought were over $100m. The claims included derivative claims in the name of the company; substantial assets were also subject to freezing injunctions. By pursuing a steadfastly independent approach and by a careful and considered approach to assessing the potential claims, including seeking advice of leading counsel, the parties ultimately chose to settle their differences and abandon a costly and high risk trial.

Replaced conflicted directors to undertake the restructuring of various CDO/CLO entities with several billion dollars of assets

We replaced boards of several issuer vehicles and helped devise and implement consensual plans of restructuring of historic and long term seriously impaired collateral. We oversaw auctions and credit bid processes designed to maximise the recoveries to noteholders and rationalise the redundant corporate structure, whilst at the same time preserving the mechanics of the waterfall. Our role also involved liaising with the note trustee, the share trustee, rating agencies and other stakeholders and with their respective counsels in Cayman, the US and UK.

Brought in by manager to replace existing independent directors

We were appointed by an investment manager to replace the existing directors who preferred to hand the realisation process to court appointed liquidators. We worked closely with all stakeholders, including the manager, valuation experts and auditors to deliver a realisation plan that was endorsed by investors. The funds held approximately $100m of slow to realise and difficult to value real estate positions.

Hostile takeover as replacement general partner in a contentious fee dispute matter

We were appointed by an overwhelming majority of institutional investors to form a new GP with the intention of removing and replacing the existing GP of a group of Delaware funds arising from a dispute regarding breach of contract and trust. The case was subject to immediate litigation in the Southern District of New York seeking declaratory judgment on key issues. We assumed control of the structure and assisted with the investigation and litigation against the former general partner. Engagement included assuming control of complex fund structures with in excess of 20 entities in Delaware and the Channel Islands. This litigation is ongoing. Subsequently, on the recommendation of a number of the LP’s involved in the initial replacement, we were engaged to replace the existing GP on a series of parallel funds.

Redundant entity preparation

We were appointed by a major financial institution to the boards of entities previously associated with an investment product, but which were now surplus to requirements, but with incomplete financial records. We reconstructed the books and records from a multitude of sources, identified and paid creditors and investors in accordance with statutory duties and subsequently placed the company into liquidation prior to dissolution. This was a multi-jurisdictional engagement in the Cayman Islands, Bahamas, BVI, Channel Islands and UK.

Replaced board following a failed restructuring

We replaced the existing independent directors in circumstances whereby an incomplete restructuring resulted in significant liabilities not being extinguished, resulting in technical insolvency. We worked with the manager and counsel, and with the support of investors, continued the wind down of $500m of leveraged illiquid real estate assets located in continental Western Europe. This assignment required an in depth understanding of the relevant GAAP and IFRS provisions, the review and agreement of realisation plans and a critical analysis of asset valuations, assumptions and realisations.

Offshore holding company restructuring and litigation

We acted as a director of a holding company board for a global Chinese manufacturing group undergoing a financial and operational restructuring. There were significant legal proceedings in Cayman, BVI, the USA, Italy, Switzerland, the PRC and Singapore, some of which are ongoing. The role involved dealing with the consequences of criminal charges, de-listing, subsidiary insolvency proceedings, funding issues, intercompany claims, contested chapter 15 issues and lender and bondholder tensions. We were also appointed to the boards of subsidiary entities, ultimately controlling valuable Luxembourg and other European based assets and income streams. We worked closely with restructuring teams in numerous jurisdictions to create value from the group’s remaining assets.

Replaced directors of and offshore broker/dealer platform with severe regulatory and compliance issues

Following the arrest and incarceration of management, we were brought in to replaced the directors of an offshore entity providing self-managed and managed investment accounts to retail customers. We worked with stranded customers, law enforcement officials and regulators in multiple jurisdictions to transition customer accounts to alternative providers and to investigate and remediate regulatory and compliance issues within the entities.

Replaced the general partner of a fund and took control of downstream structure

We set up a new GP and removed the incumbent GP of a fund and took control of the underlying investment entity, bonds and bank accounts. We worked with counsel and insolvency practitioners in several offshore jurisdictions and the Far East to establish downstream control of a multi-jurisdictional Asian group. Ultimately we were appointed third party liquidators with the benefit of statutory powers to continue the asset realisation and investigation process.

Appointed as replacement directors of an investment company by Court appointed liquidators

We replaced the former management on the board of a holding company with various US investments at the request of Court appointed liquidators and worked with the remaining stakeholders to deliver an orderly unwinding of the highly leveraged assets.