HJ Collection / Hunter Jones: HJ Collection 5 Limited update to investors

Further to our recent blog post, we are aware that the Hunter Jones group has now written to investors in HJ Collection 5 Limited to say that “the Company does not currently expect to have enough funds to pay the interest and capital falling due to noteholders in the near term”.

The letter asks “noteholders to approve a resolution deferring repayment for 12 months. The Company would have the option to extend the deferral by up to a further 12 months.”

The letter says that “If [the proposal to delay repayment by up to 24 months is] passed by the requisite majority, the Resolution will bind all noteholders including those who do not vote”.  Unless either a formal Company Voluntary Arrangement (CVA), or a restructuring sanctioned by a court, is being proposed then Refundee’s understanding of insolvency law is that investors cannot be bound by any restructuring proposal.  If a formal CVA is being proposed by Reece Mennie, the director of HJ Collection 5 Limited, then he will require the backing of a licensed insolvency practitioner for the restructuring.  He should share with all investors the contact details of that insolvency practitioner who is prepared to provide their backing.

The letter refers to “the FCA's recent High Court proceedings against Osborne Baldwin Ltd (trading as Hunter Jones) has damaged investor confidence, although the [HJ Collection 5 Limited] is not a party to those proceedings”.

While it is correct to say that HJ Collection 5 Limited is not party to the FCA’s High Court proceedings, Reece Mennie is party to those proceedings.

The FCA’s Particulars of Claim (in other words the document that the FCA have submitted to the court about Hunter Jones and Reece Mannie) state that:

“Mr Mennie, in his capacity as the shareholder and director of the [all six of the HJ Collection SPVs should…] either:

a. Cause those SPVs to immediately repay all monies currently invested by those 

investors even if they are not yet payable; or 

b. In the event that an SPV is unable to repay all current investors in full, to place the 

relevant SPVs into liquidation to allow for distribution of that SPV’s assets to 

investors.“

Refundee agrees with the FCA that the Hunter Jones SPV’s should immediately repay all investors.

If HJ Collection 5 Limited (and potentially all six of the HJ Collection SPVs) is unable to pay its debts, then it is insolvent and should be placed into a formal insolvency process, as proposed by the FCA to the High Court.

This way a licensed and regulated insolvency practitioner, who is suitably qualified and experienced, can investigate the affairs of the company and establish, independently, why HJ Collection 5 Limited is unable to pay its debts and what investors’ money has been used for.

Refundee remains ready to assist any and all investors in the six HJ Collections SPVs to make claims for reimbursement to their banks as explained in the original blog.