Isle of Man’s collapsed Louis Group now ‘worthless’
In a move that they accept will leave investors “financially devastated”, liquidators for collapsed Isle of Man-based property investment firm Louis Group have said that, following legal advice, they will not pursue claims against Louis Group IoM’s insurers, its parent company in South Africa or founder Alan Louis.
The high court order Louis Group to be wound up in 2013 as it was unable to meet its multimillion pounds debts, reports Isle of Man Today. The following year, in a striking phrase, the liquidators’ report concluded that “the taint of illegality” accompanied the group’s business dealings on the Island.
There are 180 claims outstanding against the group, all but two of which are unsecured, and which total more than £40m. In a crushing blow for creditors, liquidators Mike Simpson and Gordon Wilson say those claims are “to all intents worthless given the financial situation”.
Simpson and Wilson say that they came to this decision based upon whether such legal action would be commercially viable and in the investors’ best interests. But expanding on the comments about Louis Group’s activities being “tainted with illegality”, they noted the “pivotal” role founder Alan Louis (pictured left) played in the group’s collapse, and drew attention to the fact that he “seemingly personally benefitted from the transfer of millions of pounds of investor-sourced funds to his own personal accounts”.
They added: “We have also reported our findings to appropriate authorities and it is for them to decide on actions that might be necessary to protect the investing public going forward as well as hold Alan Louis, and any others, accountable.
“Our job was to make a commercial assessment of possible causes of action and their potential to financially benefit investors if pursued.
“In that regard, having discussed the situation with our legal counsel, we decided that there were too many unknowns to justify further expense, not least whether Alan Louis would have the assets required to satisfy any judgment that might have been obtained against him.”
The liquidators have proposed a final scheme of arrangement to bring the liquidation to an orderly end.
“We believe that this final proposed scheme will clear the path towards this whole matter being brought to an end during 2017,” they said.
They added: “Whilst we fully acknowledge investor losses in Louis Group have been significant, we hope the distributions we have now made will help investors achieve a degree of closure and all affected can now move on from what has been for many a financially devastating experience.”
The Louis Group IoM collapse is being investigated by the financial crime unit.