Investors in Neil Woodford’s collapsed investment fund are set for £230m in payouts after a court approved a controversial redress scheme today.
In a judgement in London this morning, High Court Judge Jonathan Richards said he saw no reason to contradict the conclusion of the “overwhelming majority” of investors in a scheme proposed by Link Fund Solutions (LFS), the former administrator of Neil Woodford’s collapsed investment vehicle.
“I will sanction the scheme,” Richards said.
The approval of the scheme could bring an end to a lengthy legal wrangling over the fate of some 300,000 investors who have been hunting for compensation since the collapse of the fund in 2019.
Woodford’s eponymous fund imploded amid a rush from investors to withdraw their cash following a run of big bets on unlisted start-ups.
Some 94 per cent of investors voted in December to back the scheme which is set to hand investors an initial £183.5m pound payout this quarter. Only 54,000 voted voted in the scheme in December.
Opponents of the move have until the 24th February to appeal the decision.
The scheme has proved controversial since it was proposed by the Financial Conduct Authority and Link Fund Solution.
Some campaigning groups argue they have been left heavily out of pocket and approving the redress will shut off the possibility of legal action and pursuing funds through the Financial Services Compensation, which in theory could win them more cash.
The Transparency Taskforce said today it intended to appeal against the decision.
‘The Scheme offers an appalling outcome for those who were trapped in Woodford’s flagship fund when it was suspended in June 2019,’ said Andy Agathangelou, founder of Transparency Task Force in a statement.
“Most will get back between four and eight pence in the pound of their outstanding capital losses, with nothing for the returns forfeit over the past four and a half years, let alone consequential losses, so much, much less than many have been led to believe by the FCA.”