Custom House Capital Limited

 

Last updated 4th August 2017

On the 26th July 2017 a judgment was delivered by Judge Finlay Geoghegan on the Liquidator’s recent application for the apportionment of costs and the distribution of pooled assets / misappropriated funds. In brief the judgment stated that:-

  • The monies in the pooled bank accounts should be distributed pro-rata to the claim of each client or account holder;
  • All recovered misappropriated monies should be pooled and returned to those accounts from where it originated. Distribution of these funds is to be completed on a pro-rata basis to the total misappropriations from each such account;
  • The Liquidator shall have recourse to recovered misappropriated monies only in relation to his costs for reconciliation, recovery, and distribution of such misappropriated monies.

Further to the above judgment, additional directions were provided by the Court on the 31st July 2017:-

  • An application for the Liquidator’s costs of his recent application should be served on representative parties by the 26th October 2017.
  • A full report and business plan is to be submitted to the Court by Friday the 10th November 2017. This business plan should include:
  1. Details of all client assets distributed by the Liquidator following the above noted judgment;
  2. Details of any client assets not distributed by the date of the report; and
  3. A full explanation and timetable for the distribution of those remaining assets.

For previous updates please click here.

 

Background

On 21 October 2011, a liquidator was appointed by order of the High Court to Custom House Capital Limited (In Liquidation).

A court ruling was also made under the Investor Compensation Act, 1998 (the Act) that Custom House Capital Limited was unable to meet its obligations and an administrator for the purposes of the Act was appointed. The Liquidator and the Administrator appointed was Mr Kieran Wallace, KPMG.

As Custom House Capital Limited (In Liquidation) is a member of the Investor Compensation Scheme, eligible investors of the firm that incur losses may be entitled to compensation. We will pay clients 90% of the money they have lost, however, the most we pay each investor is €20,000. The ICCL issued claim forms to known clients of Custom House Capital Limited (In Liquidation) on 4 November 2011 and notices were placed in national newspapers in January 2012 inviting all Custom House Capital Limited (In Liquidation) clients to submit claim applications.

Claims will be paid from a Fund that the ICCL has built up over a number of years from contributions paid by the investment industry. The ICCL has provided €19.7 million from its accumulated Reserves to satisfy compensation claims in this case.

The statutory deadline for clients of Custom House Capital Limited (In Liquidation) to apply for compensation under the Investor Compensation Act 1998 passed on 23 March 2012, however clients may, in exceptional circumstances, still apply for compensation (see below).

 

Can I still make a claim for compensation?

  1. The ICCL continue to accept claim application forms, however, claimants are required to include a written reason for the delay when submitting a claim application form to the ICCL.
  2. Please contact the ICCL directly to request a claim application form.
  3. Under the Act, all late claims (i.e. received after the statutory deadline, in the case of CHC - after 23 March 2012) require Central Bank approval to be admitted to the claims process.
  4. The Central Bank of Ireland will have to be satisfied that the claimant was unable to make the claim in advance of the statutory deadline before the claim can be admitted by the ICCL.

 

Where can I get further information on claiming compensation?

Click here to read the ICCL's information booklet for private investors "claiming compensation when an investment firm fails".

 

I am a client of CHC, when can I expect a decision in relation to my claim application?

If you have not received compensation from the ICCL to date, it is most likely because the ICCL is awaiting the certification of your claim from the Administrator, Mr Kieran Wallace of KPMG.  Once the ICCL receive a certification in respect of your claim, we aim to make any compensatable loss payment within 2 weeks.  Unfortunately it is not possible to give an accurate estimate of when individual claims will be resolved.  (Further details are provided below under "Why has my claim not been certified by the Administrator?)

The most recent batch of claim certifications, received from the Administrator, Mr Kieran Wallace were processed and paid in July 2017.

The ICCL will continue to liaise with the Administrator and his team in relation to the next tranches of certified claims. The records and levels of compensatable losses attached to some claims will be easier for the Administrator to establish than others.

 

Why has my claim not been certified by the Administrator?

The Act requires that the Administrator identify eligible clients and assess the level of compensatable losses suffered by each eligible client. In order to establish each client’s losses, the Administrator examines all the client records of the firm, the records relating to the investment instruments held by the firm, the records relating to the transactions and the position of each client.

The Administrator has indicated that the necessary reconciliation process, which is completed by him, in his capacity of Official Liquidator, is protracted due to the poor quality and concern over the accuracy of records within the firm in addition to the complex underlying transactions. Given these circumstances, it is not possible at this stage to give an accurate estimate of when individual claims will be resolved.

Clients of CHC are reminded that the ICCL and KPMG should be notified of any change in contact details in the intervening period.

To date compensation of circa €7.13 million has been paid in respect of 567 claims.

 

I have a query about Custom House Capital Limited (In Liquidation) - who should I contact?

If you have a query on your investments please contact the KPMG Custom House Capital Hotline which is 01 - 4101405 or alternatively, Crowe Horwath (formerly Horwath Bastow Charleton) on 01-6760951.

The Central Bank has published updated Q&A's for clients, which is available from the Central Bank website at Central Bank of Ireland - Update on Custom House Capital.

Queries on the ICCL scheme should be directed to the ICCL.