Harlequin entered insolvency proceedings on 3 October 2016. In late February, the High Court in St Vincent and the Grenadines refused to grant more time for the managers to file their proposal to creditors.
Having reviewed the evidence, the court found that Harlequin “did not demonstrate that it was acting in good faith and with due diligence”, bankruptcy trustee Brian Glasgow wrote in his letter to creditors on 9 March.
“The effect of the court’s ruling is that the proposal process will not go forward and that the company’s assets are now assigned to the trustee in bankruptcy.”
A spokesperson for Harlequin told International Adviser that the firm made an urgent application to the Eastern Caribbean Supreme Court for leave to appeal the St Vincent court’s decision to assign Harlequin Property HGV into bankruptcy.
The spokesperson said that 857 investors have signed a petition supporting Harlequin’s appeal and 95% of 885 investors surveyed stated that they wanted to avoid liquidation.
“It is clear, therefore, that HP SVG investors, who make up the vast majority of HP SVG creditors, are desperate for the right to vote on the proposal and the opportunity to avoid bankruptcy and the threat of liquidation,” the spokesperson said.
A separate petition urging the UK Financial Services Compensation Scheme (FCSC) to stop interfering in the proposal process and allow Harlequin investors the chance to avoid bankruptcy has attracted 767 signatures.
“Harlequin is fully dedicated to protecting its investors and ensuring their voices are not ignored.”
On 3 March, a certificate of assignment was issued by the supervisor of insolvency of St Vincent and the Grenadines designating Glasgow, of KPMG eastern Caribbean, as trustee in the matter of the bankruptcy of Harlequin Properties (SVG) Limited.
The certificate stated that Harlequin had failed to file a cash-flow statement or a proposal within the provided period following the filing of a notice of intention or within any court-granted extension.
The trustee was then required to send to all creditors, within five days after the date of his appointment, a notice of bankruptcy and call a first meeting of creditors.
Thousands of mostly British pensioners invested around £400m ($486.3m, €455.6m) in the unregulated scheme via UK financial advisers. Harlequin offered guaranteed returns of 10% from investing in luxury villas.
As the investment scheme is based in the Caribbean and most of the creditors are in the UK, the meeting will be held simultaneously on 31 March 2017 in Kingstown, St Vincent and Westminster, London.
Creditors will have the right to participate in the company’s bankruptcy process. At the first meeting, they will be given the opportunity to vote to confirm Glasgow’s appointment or nominate another trustee and appoint a group of inspectors.
In his letter to creditors on 9 March, Glasgow wrote: “The inspectors will work in tandem with the trustee, these inspectors will be a nominated group of creditors and will be required to supervise the trustee in bankruptcy and instruct the trustee to take whatever steps they consider appropriate to protect the company’s estate and the creditors.”
Those wishing to participate in the first meeting of creditors must submit a proof of claim form to the trustee prior to the meeting.
Creditors unable to attend can nominate a proxy to vote in their place.