In addition to the order to wind up the fund, the Supreme Court also dismissed an application made by a company called Trilogy to have itself appointed temporary responsible entity of the fund.
FTI Consulting, which was appointed administrator of LMIM in March, said it was pleased the application by Trilogy had been dismissed and said it “welcomed the order that LMIM wind up [the fund]", something which was not able to happen “while Trilogy and other parties’ litigation was proceeding”.
The decision by the Queensland judge follows a report published by FTI at the end of last month in which it recommended the winding up of the fund.
FTI’s report was met with some resistance from investors, with the Advisers Committee for Investors arguing that winding up the fund would be too costly for investors.
Sean Kelleher, a spokesperson for the ACI and chief executive of Dubai based Mondial said at the time: “While there is no doubt FTI have done an excellent job and it would be hard to find another company which could have done it better, I don’t think paying the fees it would cost to wind up the company are in the best interests of investors.”
FTI senior managing director Ginette Muller said: “These court proceedings started as a result of an investor looking to appoint Trilogy as Responsible Entity of the First Mortgage Income Fund.
“Although we feel vindicated that the judge ruled against this, we are disappointed to have been criticised for the actions we undertook which we believed were in the best interests of members. We are pleased we can now focus on our continued roles as liquidator of LM Investment Management and Responsible Entity of the First Mortgage Income Fund.”
FTI was unable to give a concrete guide as to how long the process of winding up the fund would take, or exactly how much will ultimately be distributed to investors.
