Primus Liquidators Update (1/05/18)
Since the last update released on 1 November 2017, the Liquidator has been working persistently with the CLO purchaser to finalise the sale of the remaining CLO note, which currently resides in Primus Asset Management Inc. (“PAM”). In the early and towards the middle stages of the closing process, there was reluctance from the CLO purchaser to disclose certain confidential information which were necessary for the completion and execution of the sale agreement; some of which relates to due diligence (or KYC) documentation required under Bermuda law and other specific matters relating to the CLO note. After several meetings and discussions with the CLO purchaser and the CLO trustee, all parties (i.e., the CLO purchaser, the CLO trustee and transfer agent, and PAM) have now reached agreement in principle to push the sale forward and are ready to finalise and execute the necessary paperwork to effect the transfer of the note. The aim of all parties is to bring the CLO sale and purchase matter to a close within the next two weeks. Once the sale of the CLO is closed and sale proceeds are received, PGL (sole shareholder) will commence the voluntary winding up of PAM pursuant to Delaware law. Subject to confirmation with a Delaware solicitor/practitioner, the Liquidator initially estimates that the timeframe to complete the liquidation of PAM from commencement to dissolution will approximately take two months; this is mainly due to statutory notice requirements required under Delaware law. Once the voluntary winding up of PAM is completed, the Liquidator intends to make an interim distribution to PGL shareholders based on the funds received from the PAM liquidation in April 2018. Whilst the Liquidator does not anticipate to receive any claims by creditors against PAM, a creditor claim may impede the timing of the distribution of PAM funds to PGL, and subsequently, of the interim distribution to PGL shareholders.
On 20 November 2017, the Liquidator received Notice regarding the Foreign Exchange Antitrust Litigation Case No. 13-cv-7789-LGS (the “Action”), whose proceedings are currently being heard in the US District Court for the Southern District of New York (the “Court”). The Action is a class action lawsuit brought by the Class Plaintiffs against the Defendants who have allegedly conspired to fix prices in the FX market in violation of Sections 1 and 3 of the Sherman Antitrust Act, 15 U.S.C. §§1, 3, and have allegedly manipulated the FX market in violation of the Commodity Exchange Act, 7 U.S.C. §§1, et seq. through a number of different means for FX instruments trades between 1 January 2003 and 15 December 2015. It is alleged that, as a result of this conduct, members of the Settlement Classes paid supra-competitive prices for FX transactions. The Settling Defendants (which consist of 15 banks and financial institutions) have agreed to pay a total of $2,310,275,000 (the “Settlement”), which the Claims Administrator anticipates will be no less than $1,894,425,500 after Court-approved costs, fees and expenses. According to the Notice, Primus Financial Products, LLC (“PFP”) may be a member of one of the Settlement Classes. In order to be eligible to participate in the Settlement, however, a valid claim form must be filed and accepted by the Claims Administrator on or before March 22, 2018. Thereafter, the Court will hold a Fairness Hearing on 23 May 2018 to decide whether or not to approve the Settlements and Plan of Distribution; accordingly, there may be appeals afterwards which can potentially take some time to conclude. As the claims submission process has just begun, the Claims Administrator is unable to advise on the likelihood of any appeals until the Fairness Hearing has concluded. In the interim between 22 March and 23 May, the Claims Administrator will begin disseminating Claim Assessment Notifications to respective Claimants, which will contain PFP’s eligible participation amount and the basis for the Claims Administrator’s calculations of the same.1 The Liquidator will, of course, review the decision of the Claims Administrator and may take appropriate action under the circumstances. Whilst the Liquidator is working to submit PFP’s formal settlement claim on the matter by deadline date, he is also assessing any potential costs that may be incurred mainly in gathering FX trading data from Primus’ source systems and in gathering source documentation in support of PFPs claim which may be required from him by the Claims Administrator. The Liquidator will provide further updates on the Settlement claim to PGL shareholders as soon as more information becomes available from the Claims Administrator.
More information about the Settlement is available at fxantitrustsettlement.com