LF Equity Income Fund Settlement Scheme
Welcome to the website for the LF Equity Income Fund (formerly the LF Woodford Equity Income Fund – ‘the WEIF’) Settlement Scheme (the Scheme). The Scheme will create a Settlement Fund of up to £230 million, that will be used to make payments to relevant investors that hold shares in the WEIF. ‘Relevant investors’ are referred to as ‘Scheme Creditors’ in the Scheme Rules.
The site will be updated with relevant announcements and documents as the Scheme progresses.
LFSL is pleased to announce that the Scheme has been approved by the Court (having been approved by the required majority of Scheme Creditors who voted at the meeting of Scheme Creditors held on 13 December 2023). The Court Order sanctioning the Scheme was registered with the Registrar of Companies on 28 February 2024, and is now binding on LFSL and all relevant investors. The Scheme became fully effective on 5 March 2024.
Scheme Implementation – Update as at 25 March 2024
Distribution to Scheme Creditors
LFSL is pleased to confirm that it has made the Initial Settlement Account Distribution (as defined in the Scheme) in the amount of £185,717,355.72 to the WEIF, and that LFSL expects that the WEIF will make an initial distribution to registered holders of shares in the WEIF on 28 March 2024. Scheme Creditors will receive payments in the same way as they have previously received capital distribution payments from the WEIF. It will take additional time for Scheme Creditors who have invested through intermediaries to receive their payments, depending on the time it takes for intermediaries to process distributions.
The Scheme Website will be updated periodically with further information about the Scheme, and any further payments that may be made to Scheme Creditors. Scheme Creditors are encouraged to check the Scheme Website for updates periodically.
Initial Reserve Amount
In accordance with the Scheme, LFSL has established a reserve fund (the “Reserve“), to enable it to meet liabilities that did not form part of the Scheme (the Excluded Liabilities). The Excluded Liabilities include, but are not limited to, LFSL’s ongoing operational costs (including in relation to the WEIF), its tax liabilities and its wind-down. The Reserve has been set by LFSL, in consultation with the Scheme Supervisors, at £46,500,000 (the Initial Reserve Amount). The Reserve will be reassessed by LFSL and the Scheme Supervisors in early September.
What does the LF Equity Income Fund Settlement Scheme do?
The Scheme will settle any claims that relevant investors may have against Link Fund Solutions Limited (LFSL), in return for a payment out of the Settlement Fund. LFSL is the authorised corporate director of the WEIF.
There is a film available on this site to help you understand what is a Scheme of Arrangement. You can watch it here.
LFSL believes the Scheme is the best outcome for investors. The Scheme provides for the maximum amount possible to be paid from LFSL as all of LFSL’s available assets will be put into the Settlement Fund. There will also be a material voluntary contribution from LFSL’s ultimate parent Link Administration Holdings Limited (Link Group) that will not be made if the Scheme does not become effective. If the Scheme is not approved, investors are not guaranteed to receive anything at all and it could be many years before any dispute is resolved.
The FCA has stated that, if approved: “the Scheme offers investors substantially more than is otherwise available from LFSL alone and more than would be achieved by any other means, given the contribution by Link Group.”
To read the full FCA announcement on the Scheme from 19th April 2023, please see here.
Investors’ Committee and Investor Advocate
To help ensure that the Scheme is fair to all investors, an Investors’ Committee was established to act independently of LFSL and to represent the interests and views of those investors affected. The Chairman of the Investors’ Committee, Jamie Drummond Smith, provided a report on the views of the Committee in respect of the Scheme on 5 October 2023, which can be found here. Watch Jamie discussing the Scheme and the Committee’s conclusion that it offers a better outcome than the alternatives and that the Committee supports it here.
LFS also appointed Joe Bannister as an independent Investor Advocate. His role was to help investors by answering any general questions that they may have about the Scheme and also take their feedback on the Scheme and discuss it with LFSL. Joe is an experienced lawyer.