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Investors frustrated as wait for Woodford redress continues

Investors frustrated as wait for Woodford redress continues
Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
22/01/2024
Updated:
22/01/2024

Trapped Woodford investors will have to wait until early February to find out if the court has given the go ahead for the £200m redress scheme.

Failed investors of the LF Woodford Equity Income Fund (WEIF), now known as the LF Equity Income Fund have to wait a little longer to find out the outcome of the sanction hearing held at the High Court.

The all-important sanction hearing in front of Mr. Justice Richards straddled Thursday 18 and Friday 19 January, with investors expecting the outcome soon afterwards.

However, while the hearing is now complete, a decision was reserved, with interested parties expected to receive the draft embargoed judgment within two weeks – around 2 February 2024.

The issued judgment is then expected to be published a week later.

Woodford redress – a four-year journey for compensation

Link Fund Solutions Limited (LFSL) asked the High Court to sanction (approve) the £200m redress scheme after more than 54,000 creditors turned out and voted in the scheme meeting held in December 2023.

For the scheme to stand a chance of being approved, it required the support of a majority in number, representing at least 75% in value.

Indeed, the votes garnered smashed through the necessary threshold, with 93.7% voting in favour of the redress scheme, representing 96.1% in value.

Once the scheme is sanctioned by the High Court, and if no appeals are brought forward, an initial £183.5m is expected to be distributed in March 2024 – irrespective of whether creditors voted or not.

To date, £2.56bn has already been distributed from the £3.6bn value of the flagship fund which was suspended on 3 June 2019 following a surge in redemption requests which couldn’t be readily met after a period of poor performance.

In October 2019, the fund’s administrators confirmed the fund would be wound up with cash expected to be returned to investors “as soon as possible”.

To get to this latest stage, a number of requirements have had to be met, including the sale of Link Group’s Fund Solutions’ business to the Waystone Group which completed in October 2023.

Based on a previous timeline published by LFSL, this is what investors had been told to expect:

  • 9am 9 February 2024 – expected effective time. The scheme will become fully effective on this date if the court orders the sanction of the scheme after the sanction hearing on 18 January 2024 and no appeal of that decision is made within 21 days of the sanction order being made.
  • By 31 March 2024 – The first payments from the settlement fund, estimated to be between £183.5m and £200m, are expected to be made as soon as the first quarter of 2024 if the scheme is approved.

 

Meanwhile, in October 2022, RGL Group filed a group action claim against investment platform Hargreaves Lansdown Asset Management and Link Fund Solutions.

It is now only pursuing the Hargreaves Lansdown claim and said it is “the only claim seeking to recover losses suffered by investors as a result of the collapse of the WEIF in June 2019.”

It is acting for around 3,000 investors but an estimated 300,000 investors were left stranded in the WEIF at suspension. RGL Group is urging investors who were previously registered with other claimant groups such as Harcus Parker or Leigh Day for claims against Link to join the RGL Group claim, provided they invested in the WEIF via the Hargreaves Lansdown platform.

Currently, there is no deadline for investors to come forward. The link to register a claim is via Woodford Litigation.