Privy Council Upholds Weavering Preference Claim

The Judicial Committee of the Privy Council has today handed down its decision in SEB v Conway and Shakespeare (as liquidators of Weavering Macro Fixed Income Fund Limited) [2019] UKPC 37 dismissing SEB's appeal by which it sought to overturn orders requiring it to re-pay redemption proceeds it received on the basis that they constituted preference payments.

The proceedings, brought by Weavering's liquidators (formerly Ian Stokoe and David Walker, and now Jess Shakespeare and Simon Conway, of PricewaterhouseCoopers), sought the recovery of redemption sums paid to SEB, a former investor in the failed Weavering fund, shortly before the fund's collapse in March 2009 following the uncovering of the fraud committed by Magnus Peterson, the fund's principal investment manager, for which he is now serving a term of 13 years' imprisonment.

Mourant partner Shaun Folpp, who acted for Weavering's liquidators (led by David Lord QC) said: "The Privy Council's decision is to be welcomed. As was the case with both the first instance and appeal decisions, the decision of the Privy Council reinforces the policy behind much of the Cayman Islands' insolvency regime, which is to restore value to a company for the benefit of its creditors who, in turn, ought to share equally in the distribution of the company’s assets".

The proceedings mark the first successful attempt by liquidators of a Cayman Islands investment fund to recover redemption proceeds paid out to an investor on the basis of preference. A copy of the decision is available here.

Mourant Partner Shaun Folpp appeared before the Privy Council, led by David Lord QC of Three Stone. They were assisted by Senior Associates Kimberley Leng and Jonathan Moffatt. Lipman Karas’ Jeremy Scott and James Hayton acted as London agents.