Link Fund Solutions (LFSL) has officially launched its scheme of arrangement in relation to the LF Equity Income fund (formerly Woodford Equity Income) and is now binding for Link and all scheme creditors.
According to Link, investors in WEIF can expect payments to commence in early April this year, although it may take slightly longer for those invested through intermediaries. Further updates on payments will be published by Link on its website, www.lfwoodfordfundscheme.com.
Under the scheme, WEIF will make payments to its direct shareholders, such as platforms, proportionately based on the number of shares they hold, as well as the class of shares. The platforms will then pay their users. WEIF obtains the money to pay its investors via the settlement fund set up under the scheme.
See also: Woodford investors granted single vote on Link redress scheme
A spokesperson for LFSL said: “We are pleased the scheme has now become effective, following the approval by the court and the overwhelming support of scheme creditors. We have always believed the scheme was the best option to provide investors with a substantial level of redress, with certainty of payment in the near future.
“We would like to once again thank all investors who took the time to vote on the scheme and make their voices heard. Our focus is now on ensuring payments reach scheme creditors as soon as possible.”
Scheme controversy
Not everybody has been supportive of the scheme of arrangement decided by the High Court in February, however.
According to the Transparency Task Force as well as several financial academics, the scheme could “forcibly denude affected investors of their statutory protections”, which allow them to seek compensation via the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsmen Service (FOS).
The All-Party Parliamentary Group on Fairer Financial Services has also criticised the Financial Conduct Authority’s role in supporting the scheme, with MP and APPG chair Rob Black warning that is “does not appear to be in the interests of Woodford investors, consumers as a whole, or UK PLC”.
