Liquidators estimate that the distribution would yield 34 cents in the dollar for each investor and creditor.
KordaMentha, the liquidators of New Zealand company BlackfortFX aka Arena Capital, have earlier today published their Fourth Report into the case.
BlackfortFX, which had marketed itself as a foreign exchange company since the start of its operations in the spring of 2014, had never actually traded in the FX market, the investigation into its activities has found. Thus far, liquidators have focused on recovering money from debtor clients – that is, clients who received fictitious profits from Arena, as well as realizing assets of the company.
According to the latest report, KordaMentha have now agreed repayment arrangements with 40 of the 96 debtor clients, with the total recoveries from debtor clients now at NZ$718,000.
Liquidators are planning an interim distribution to creditors and have filed an application for directions with the Court on February 22, 2017.
KordaMentha proposes that all of the recovered assets of Arena form one common pool of assets for distribution to both investors in Arena and general unsecured creditors. The pari passu pro rata distribution on a ‘one common pool’ approach outlined by KordaMentha would yield a distribution of 34 cents in the dollar for each investor and creditor.
KordaMentha were appointed receivers of Arena in May 2015, after New Zealand’s Financial Markets Authority (FMA) confirmed that it was undertaking an investigation into the “broker”. The FMA obtained asset preservation orders over the assets of Arena/Blackfort and associated persons amid concerns that investor funds might be at risk.
In October 2016, New Zealand’s Serious Fraud Office filed charges against Arena’s director Jimmie McNicholl. The SFO alleged that BlackfortFX had obtained registration as a financial services provider by deception. Under the allegations, BlackfortFX was a Ponzi scheme into which investors paid approximately NZ$8.3 million when there was in fact, no trading undertaken.
SFO Director, Julie Read said back then “There are hundreds of potential victims in this scheme whose funds will be at risk.”