Trapped investors in the failed Woodford Equity Income Fund are urged to “have their say” as the deadline to cast a vote on the proposed redress scheme is 5pm today.
Investors have until 5pm, Monday 4 December to vote on the Link Fund Solutions Limited (LFSL) proposed scheme of arrangement offering up to £230m in redress.
The deadline to vote in person has already passed (5pm, Thursday 30 November 2023).
The vote window opened in October for investors in the LF Equity Income Fund (formerly Woodford Equity Income Fund, WEIF) who could see an initial payment of between £183.5m and £200m in the first quarter of 2024 if the scheme is approved.
This settlement fund would include all of LFSL’s available assets and a voluntary contribution of £60m from its parent company.
The Woodford vote scheme
For the redress scheme to get the go ahead, it requires the support of 75% by value, and a majority in number in the vote.
LFSL said it has “actively sought to reach as many scheme creditors as possible to ensure they vote”.
Direct investors in the WEIF have been contacted while those who invested via a third party such as a platform, broker or intermediary should also have been made aware of the scheme arrangement and looming deadline to vote.
You can vote online via this portal: https://voting.lfwoodfordfundscheme.com/p/welcome and you can also contact the scheme helpline on 020 3991 0224 for a copy of the voting form to be sent to your address or for help through the process.
The scheme meeting takes place on 13 December, with LFSL set to confirm the outcome on 15 December.
A sanction hearing is then set to take place on 18 January 2024 where if the required number and value of creditors vote in favour of the scheme, LFSL will ask the court for approval.
Then 9am on 9 February is the ‘effective time’, meaning the scheme becomes fully effective on this date if the court orders the sanction and no appeal of the decision is made within 21 days.
If the scheme is not approved due to the threshold in votes not being reached, LFSL would dispute all liability to scheme creditors. It said resolving these disputes is “likely to take years”.
“Regardless of whether LFSL is successful, it will result in less money being available from LFSL to pay to relevant investors due to the cost of LFSL’s defence against those claims, and as a contribution of £60 million from our parent entity will not be paid”, it explained.
LFSL said it considers the scheme to be in the best interests of scheme creditors, “offering the certainty of payment from a settlement fund of up to £230m”.
It added that the scheme will settle disputed claims against LFSL brought by regulator, the Financial Conduct Authority (FCA) and certain investors in the WEIF, and “has been designed to allow LFSL to make the maximum possible payment at the earliest opportunity, with representatives of PwC being appointed to supervise the scheme’s use of the settlement fund”.
A spokesperson for LFSL said: “It’s important that investors make sure their voices are heard with the deadline for voting on the scheme just seven days away. We continue to believe the scheme is the best option available for investors, both materially enhancing the amount of redress available from LFSL and providing the fastest route for redress possible. Without the scheme there is no guarantee of any compensation for investors”.
Woodford: A falling star fund manager who failed investors
Fund manager Neil Woodford was forced to suspend his flagship fund – Woodford Equity Income Fund – on 3 June 2019 as he couldn’t meet a surge in redemption requests following a period of poor performance.
In October 2019, the fund’s administrators confirmed the £3bn fund would be wound up with cash returned to investors “as soon as possible”.
To date, £2.56bn has already been distributed from the £3.6bn value of the fund.