Lawyers for defendants in a civil suit over the £237m collapse of mini-bond issuer London Capital & Finance this morning excused themselves from court for the first hearing date, saying there was no prospect of fees being paid.
London Capital & Finance PLC (in administration) and Anor v Thomson and Ors. Centered on collapse London Capital & Finance (LCF)’s ‘misleading’ bond sales and advertising
At the outset of the submission, Stephen Robbins KC, on behalf of the administrators, said: “LCF sold 16,706 bonds to 11,625 members of the public, raising a total of over £237 million. ” he said.
But before submissions could begin, Ian Mays KC, representing the first defendant, former LCF chief executive Michael Andrew Thomson, took the stand. He told the court Mr Thomson, who is subject to an asset freezing order, had been unable to release funds to pay his lawyers “despite his best efforts”.
Mr Mayes said: “We were instructed as solicitors in the incident on the 8th.”th January. Your Lordships will have seen the written submissions and openings that we submitted on the 15th.th. As a result of considering out-position, [the] Pursuant to our agreement and with the benefit of guidance from the Bar Standards Board, we have gathered here as a courtesy to withdraw from the litigation.
“Rather than withdrawing because we are embarrassed by instructions from Mr Thomson, it is important that we make it clear that this is not the case. I have accepted the instructions in terms.
“Payment of litigation costs” [was] From the value of the first defendant’s property [which is the] Subject to freezing order. Despite our best efforts to guide attorneys, we were unable to convert it into the release of cash for attorneys and legal fees.
“I regret to inform you.” [the court] I can’t go on any longer. ”
Asked by Mr Justice Miles if the lawyers would leave, Mayes replied: “With the Lord’s permission” before the three barristers packed up and left the courtroom.
LCF is alleged to have misrepresented in marketing materials and bond sales the value of the securities, the “rigorous due diligence” conducted before lending, and the financial reviews of each borrower conducted before lending. .
Thomson, Simon Hume-Kendall, Elten Barker, Spencer Golding, Paul Careless, Serge Financial Ltd., John Russell-Murphy and Robert Sedgwick are suspected of fraudulent trading, and Grosvenor Park Intelligent・Investments Limited and Helen Hume-Kendall are required to hold in trust the LCF funds paid by LCF, which is suspected to have breached the trust property.
The plaintiffs allege that all defendants are liable for the losses incurred by the bondholders.
Funds from LCF were used to make payments to the defendants totaling millions of dollars, the court said. According to court documents, the defendants’ assets include real estate, investments, luxury travel, private members’ clubs, jewelry such as Rolex and Patek Philippe watches, cars such as a Porsche 911 and Rolls-Royce Dawn, gold bullion, guns and donations to the Conservative Party. It is said that the funds were spent on. party.
“The only way LCF wanted bondholders to be repaid was to attract other bondholders,” Hayes said. In other words, it was a pyramid scheme. Borrowing companies have been unable to repay their loans to LCF, and many have been placed into administration. ”
He said the money in court had been “pourd” from bondholders to the defendants, adding: “Every borrowing company had a relationship with the first, second, third and fourth defendants and the loans were It was part of a device to collect funds from creditors to the defendants.” I am an individual.
Comments from bondholders who learned their investments were lost were included in the plaintiffs’ court documents, which added: “LCF bondholders were confused as the reality became clear.”
“Retirees who had invested their life savings had to face the reality that they had lost everything. Disabled and incapacitated people who had no hope of earning money again were grieving the fact that they had been defrauded. I felt angry.”
The trial is scheduled to last 20 weeks.