Fairfield Sentry claims refused by the Privy Council
On 16 April 2014, the Judicial Committee of the Privy Counsel handed down its decision in the trial of certain preliminary issues in Fairfield Sentry Ltd (in Liquidation) v Migani and Others.
Fairfield Sentry (in liquidation) (the fund) was a BVI company and was the largest of a number of feeder funds that invested in the now infamous Bernard L Madoff Investment Securities (BLMIS). As is now well known, BLMIS was a Ponzi scheme, possibly the largest in history, and returns to investors were fictitious. Between 1997 and 2008, approximately 95 per cent of the fund’s assets (totalling $7.2bn, or £4.3bn) were invested in BLMIS. Members of the fund subscribed for shares in the fund and were entitled to redeem their shares at a price dependent on the fund’s net asset value per share (NAV). The fund subsequently increased or reduced its investment in BLMIS by the amount of subscriptions or redemptions by its own investors.
On 18 December, the directors of the fund suspended the fund’s NAV, stopping any future redemption of its shares. The fund was placed into liquidation by the High Court of the Virgin Islands on 21 July 2009…
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