Caledonian Bank Limited (In Official Liquidation) Update - Q3 2015

In our last quarterly update we detailed the events leading up to the liquidation of Caledonian Bank Limited (In Official Liquidation) (the “Bank”) and Caledonian Securities Limited (In Official Liquidation) (“Securities”) and informed you that the Grand Court of the Cayman Islands had appointed Mr. Keiran Hutchison and Claire Loebell as Joint Official Liquidators of the Bank and Securities (the “JOLs”).

In addition, we mentioned that the JOLs were looking to make an interim distribution to deposit holders and other creditors in respect of the Bank and that those who held custody accounts with Securities would be entitled to the return of their custody assets.

The JOLs have since confirmed that the expected return to creditors in respect of the Bank would be in the range of 85 to 93% of their claims and that, as at 1 July 2015, the intention was to make an initial interim distribution to creditors of 45 cents in the dollar. On 29 July 2015, this was revised upwards to 75 cents in the dollar due to a range of factors including that no material unexpected claims against the Bank had surfaced and a good deal of the Bank’s assets had been realised. These distributions commenced on 30 July 2015 and are ongoing subject to satisfaction of KYC and other regulatory requirements by the relevant creditors.

Any balance payable to creditors (or such proportion thereof as the available assets permit) will then be paid out as and when liquidity allows or otherwise at the completion of the liquidation.

In connection with the SEC and the claim of $76 million against the Bank, the JOLs confirmed on 21 August 2015 that they had reached an agreement in principle on settlement with the SEC and that they had notified the United States District Court for the Southern District of New York of such settlement. No further details as to the value or terms of such settlement have been provided but, as the value of assets subject to the freezing order in the US had been reduced to $7 million from the original $76 million, we would expect the settlement figure to be less than or equal to $7 million. The settlement of the litigation may mean that, subject to the realisation of some remaining assets, a further distribution may be likely in the near future, although this is of course just speculation.