JCPC/2018/0064

Pearson (in his capacity as Additional Liquidator of Herald Fund SPC (in Official Liquidation)) (Appellant) v Primeo Fund (in Official Liquidation) (Respondent) (Cayman Islands)

Judgment given

Case summary


Case ID

JCPC/2018/0064

Jurisdiction

Cayman Islands

Parties

Appellant(s)

Michael Pearson (in his capacity as Additional Liquidator of Herald Fund SPC (in Official Liquidation))

Respondent(s)

Primeo Fund (in Official Liquidation)

Issue

The central issue in this appeal is the proper interpretation of section 112(2) of the Companies Law (2013 Revision). The Appellant argues it should be permitted to rectify the Herald Fund SPC (in Official Liquidation) register in the manner he contends.

Facts

The Appellant is the Additional Liquidator of Herald Fund SPC which was incorporated in 2004 under the laws of the Cayman Islands as an exempted company segregated portfolio company and was registered as a mutual fund. The Respondent, Primeo, was incorporated in 1993 as an exempted company under the laws of the Cayman Islands and was registered as a mutual fund. Herald invested all of its assets with Bernard L Madoff Investment Securities (“BLMIS”). Primeo originally invested its assets with BLMIS directly. In 2004, Primeo began investing in BLMIS indirectly by subscribing for shares in Herald and in 2007 it assigned its direct investment in BLMIS to Herald in exchange for shares in Herald. On 11 December 2008 Bernard Madoff confessed that BLMIS was a fraudulent Ponzi scheme. It followed that when Primeo assigned its rights in its account with BLMIS to Herald (“Primeo In Specie Subscription”) all the calculations were made on fraudulent and fictious figures provided by BLMIS. On 16 July 2013 Herald was placed in official liquidation. As Herald’s liquidation is solvent there will be surplus assets for distribution to Herald’s members. The basis for this appeal is section 112(2) of the Companies Law (2013 Revision) which provides that “in the case of solvent liquidation of a company which has issued redeemable shares at prices based upon its net asset value from time to time, the liquidator shall have the power to settle, and, if necessary rectify the company’s register of members, thereby adjusting the rights of members amongst themselves”. The Appellant argues this extends to pre-existing rights. The Appellant now appeals to the Privy Council.

Date of issue

22 June 2018

Judgment details


Judgment date

27 January 2020

Neutral citation

[2020] UKPC 3

Appeal


Justices

Hearing dates

Start date

29 October 2019

End date

29 October 2019

Watch hearings


29 October 2019 - Morning session

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29 October 2019 - Afternoon session

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Change log

Last updated 9 May 2024

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