The case is a cynical plot to divert attention from Capita, claimants say.
Investors claiming compensation over the failed Arch cru funds said a case against its managers Arch Financial Products, suspended in the High Court today (12.12.13), was a cynical ploy to divert attention from the true culprit.
They say the case brought by SPL Private Finance – a fund manager appointed by Fund Director Capita FM to salvage Arch cru’s failed operations – is pointless and may only damage what remains of their investments if unsuccessful.
SPL is claiming £150 million on behalf of investors against Arch FP, which has only £49,000 of assets, and directors Robin Farrell and Robert Addison, who have represented themselves in courts and are understood to have no assets to pay any award.
“It is untenable to bring an action for £150 million against a company with assets of £49,000 and no Professional Indemnity insurance. The real target should be Capita which had overall responsibility and the means to pay compensation,’ said John Hawkes, chairman of the Arch cru Litigation Committee (ACLC).
The case against AFP, Farrell and Addison has been suspended for two weeks, but ACLC, representing 800 investors, said it would come as no great surprise if it is withdrawn altogether once the deadline for accepting Capital’s own offer to investors has passed on December 31.
Capita has made a no-fault offer to investors of around 15 per cent of the value of their investment which was condemned by ACLC as ‘derisory’.
“Investors were suckered into this nightmare and now their remaining investment is being spent on an unsustainable action against those who ruined them and is at risk of adverse costs if the case is lost. We hope SPL will reflect on the situation and desist in its claim.
Mr Hawkes said ACLC’s own case against was well advanced following a Group Litigation Order granted by the High Court last month. “We urge all Arch investors to join and reject the compensation offer that Capita FM has made. Details are at www.archcruclaims.org.”