COURT OF APPEAL
APPEAL OF AN ORDER FOR WINDING UP ON THE BASIS THAT THE COMPANY WAS UNABLE TO PAY ITS DEBTS – DEBT ALLEGED TO HAVE BEEN SATISFIED BY THE TRANSFER OF CERTAIN SHARES TO THE REDEEMING SHAREHOLDERS – IN-KIND DISTRIBUTION MUST BE FROM ASSETS OF THE FUND WHEN THE DEBT CRYSTALLISED – TRANSFER OF SHARES WITHOUT REAL UNDERLYING VALUE NOT SUFFICIENT TO DISCHARGE THE DEBTS IN ANY EVENT – APPEAL DISMISSED
The articles of association of FIA Leveraged Fund (the “Fund”) permitted the holder of any class of participating shares the right to be redeemed on delivery of a redemption request. The Fund was obliged to redeem at the value fixed on the redemption date. Payment could be made in cash or in-kind. In response to a redemption request, the Fund transferred to the redeeming investors certain shares in another entity which were not assets of the Fund on the redemption date. In fact, the Company whose shares were so transferred was not in existence at the relevant date.