In an email sent to investors and IFAs last week, seen by International Adviser, the former salesman turned IFA describes events leading up to and following the announcement that the company was to be put into administration in March this year.
LMIM ran a collection of funds which invested in the Australian property market, either by buying property and land for development directly, or by providing mortgages to developers and suffered badly due to the effects of the global financial crisis.
The IFA’s email reveals that staff based in LM’s London office were unaware the company was to be put into administration, explaining that he had only as much iinformation as advisers, such as audited accounts and other fund information. Although he adds he was aware a takeover attempt by a fund manager called Trilogy was "having an impact on the business".
Trilogy took control of the LM First Mortgage Income Fund in November last year.
In the email, the IFA explains, in detail, events on the day he and his colleagues found out the company was to be put into administration.
The email says: “On the day the voluntary administrator was brought into the LM head office, we were informed of the news a few hours ahead of the adviser/investor notification.
“We were informally told to expect redundancy with virtual immediate effect. It rapidly became painfully apparent that the LM entity structure allowed the VA to immediately cut the international offices adrift. The London office was left with liabilities far in excess of any assets available to cover them. All invoices/bills/salaries historically were paid by LM HQ into the London office but that link had been severed.”
The email continues, explaining how the team worked for weeks liquidating the LM entity and dealing with adviser and investor enquires, work the IFA points out was unpaid, along with their outstanding salary and notice period.
“We are not looking for sympathy – we simply make the point that the LM earthquake struck unannounced at the centre of our lives too and we still are dealing with the major aftershocks,” adds the email.
