Voting on a £230mn compensation scheme for investors trapped in the failed Woodford Equity Income fund has now opened.
Link Fund Solutions Limited, the administrator of the fund once run by Neil Woodford, has opened the voting following an order by Mrs Justice Bacon in the High Court on October 13.
Mrs Bacon said LFSL must convene a single meeting of creditors affected to vote on the proposed scheme.
A scheme of arrangement is a court-approved arrangement between a company, its shareholders, and its creditors.
The meeting will take place on December 13 online and those affected have until December 4 to register to vote.
The result is expected to be announced by December 15 and requires the support of 75 per cent by value, and a majority in number, of the scheme creditors.
A spokesperson for LFSL said: “We are pleased that the court has agreed that the scheme can proceed to a vote.
“This is another important step forward in the process of ensuring investors in the fund at the point of its suspension (and their successors and transferees) can receive payments, much sooner and with more certainty than under any alternative arrangements.
“LFSL believes that the terms of the scheme, if implemented, will materially enhance the amount of redress available to scheme creditors from LFSL, in comparison to the position had LFSL not entered into a settlement with the FCA, and the scheme had not been proposed.”
The Financial Conduct Authority considers that the loss incurred by investors in the Woodford Equity Income Fund is up to £298mn.
This means the total proposed by the LFSL scheme is around 77 per cent of the FCA’s view of total losses.
The settlement fund would be up to £230mn and comprises all of LFSL’s assets as well as a £60mn voluntary contribution from the firm’s parent company.
If approved, it expects to distribute between £183.5mn and £200mn in the first quarter of 2024 if the scheme is approved.
Link was responsible for monitoring and supervising the investments executed by Neil Woodford’s eponymous fund before it failed in October 2019.
In November 2022, Link’s figures showed there was £50mn still in the fund after £2.56bn was sent to investors through five payments.
In April this year, the FCA announced that Link made ‘critical errors and mistakes’ which ‘caused significant losses for those investors who remained in the fund when it was suspended’.
tara.o'connor@ft.com
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