MFSA: Maltese bond holders be vigilant as ARM appoint UK liquidator
ARM has filed an application in the UK courts requesting that ARM be placed under voluntary arrangement and that a provisional liquidator be appointed in the UK, the Malta Financial Services Authority (MFSA) said this afternoon.
On September 30, 2013, the MFSA had urged Maltese investors who hold an investment in ARM Asset Backed Securities S.A. to seek independent advice in order to make any claims after a Luxembourg court confirmed a judgment concerning the CSSF decision to refuse to grant a licence to ARM.
ARM securities were sold in Malta by two financial intermediary firms and it is believed that hundreds of Maltese invested in this product.
However, the MFSA said that there have been important developments the outcome of which is as yet unclear.
On October 14, 2013, ARM issued a notice to Bondholders informing investors that on October 9, 2013, Mark James Shaw and Malcolm Cohen of BDO LLP an auditing and professional consultancy firm were appointed as provisional liquidators of ARM by order of the High Court of Justice of England and Wales.
The provisional liquidators have the exclusive power to control and manage ARM’s affairs, and the powers of the Directors of ARM are suspended. The provisional liquidators are now assessing which assets belong to ARM and their value, as well as how much may be due to creditors.
The appointment of the provisional liquidators was made at the request of ARM on the following grounds that it is just and equitable to do so; ARM is insolvent; ARM has ceased its business and ARM’s Centre of Main Interests is in the United Kingdom and that therefore the English court may open insolvency proceedings.
The MFSA said that at this stage, bondholders do not need to register their interest or claim in the provisional liquidation. However, bondholders are urged to be vigilant and stay aware of any developments. At some point, bondholders may be invited to register their claims and bondholders will need to be ready to do so.
Given the recent developments in the UK, it is still unclear whether the process related to the dissolution and liquidation of ARM in Luxembourg will continue.