WealthTek LLP – Appointment of Special Administrators

WealthTek LLP – Appointment of Special Administrators

10 June 2024 - Update to clients
On 7 June 2024, the court heard the JSAs’ application seeking approval of the Distribution Plan.   
 
After considering the evidence and the submissions of our leading counsel, the court has asked that the JSAs provide more detail on the basis on which clients’ entitlements to client assets have been calculated for the purposes of making returns of client assets under the Distribution Plan.  

Specifically, before approving the Distribution Plan in the terms sought, the court requires more detail on the approach which the JSAs propose to take in addressing the deficiencies and inaccuracies in WealthTek’s books and records, in order to be satisfied that it represents the fairest outcome for all clients of the firm.
 
We should be clear that the court did not turn down the Distribution Plan.  Rather, the court adjourned the hearing in order to receive further information before making a decision.  

The adjournment will mean that there is a delay until the JSAs can return to court.  The JSAs will work together with their legal advisors to prepare the necessary materials to ensure that the delay is minimised and so that client assets can be returned as soon as reasonably practicable.

We do appreciate that clients will be concerned about this adjournment, not least given that the Distribution Plan, after careful consideration, was supported by the JSAs, as well as the Clients’ and Creditors’ Committee.  

However, this does highlight the difficulties faced when balancing the interests of clients to ensure a fair outcome when there are missing assets and deficient records.  The JSAs are officers of the court, and respect that the court itself will also wish to be satisfied that the proposed Distribution Plan fairly deals with the respective rights of clients before exercising its discretion to approve the Distribution Plan.  
 
We will provide clients with a further update once the date of the adjourned hearing has been confirmed.
 
If clients have any questions, they should contact WealthTekClients@bdo.co.uk or call +44 (0)113 521 4470 or +44 (0)151 351 4700.


3 June 2024 - Update to clients
The JSAs’ Distribution Plan application is listed to be heard on Friday 7 June 2024 at 10.30am in person before Mr Justice Rajah in the High Court of Justice, Business and Property Courts of England and Wales, 7 Rolls Building, Fetter Lane, London EC4A 1NL. The court room number will be available on the online cause list the afternoon before the hearing and also displayed in the lobby of the Rolls Building at the same address on the day of the hearing.

As previously confirmed, clients are not required to attend the Court hearing. However, the Court hearing will be held in public and anyone is able to attend, if they wish to do so. Any person intending to participate in the Court hearing should contact the JSAs as soon as possible.


24 May 2024 - Update to clients
Further to our update to Clients on 10 May 2024, the sealed Application Notice is now available below. The orders and directions sought by the Joint Special Administrators (“JSAs”) in the Application Notice mirror those stated in paragraph 10 of Shane Crooks’ second witness statement filed in support of the application.

The relief contemplated in paragraph (2), if granted, will enable the JSAs to pay any unclaimed Client Assets and Client Money to the Insolvency Services Account. This is explained further in paragraphs 81 and 158 of the witness statement; and

The relief sought in paragraph (3) envisages the court varying the order of priority for the payment of expenses on the grounds that there is a shortfall of Client Assets and Client Money. This is explained further in paragraphs 141 to 146 of the witness statement.


10 May 2024 - Update to clients
The JSAs of WealthTek confirm that, on Thursday, 9 May 2024, an application was filed at Court for the approval of the Distribution Plan which, once approved, will provide the mechanism for the return of Client Assets. The Distribution Plan was approved by the Clients’ and Creditors’ Committee on Thursday, 2 May 2024.

The Application is listed to be heard at the High Court of Justice, Business and Property Courts of England and Wales, the Rolls Building, 7 Rolls Buildings, Fetter Lane, London, EC4A 1NL on Friday, 7 June 2024. Further details about the Court hearing will be made available here once available. Clients are not required to attend the Court hearing. However, the Court hearing will be held in public and anyone is able to attend, if they wish to do so. Any person intending to participate in the Court hearing should contact the JSAs as soon as possible. The following documents are now available below:

  • The Distribution Plan
  • The Addendum to the Distribution Plan
  • The Explanatory Statement
  • The witness statement supporting the application
  • The Distribution Plan Flowchart and Frequently Asked Questions


The Distribution Plan is a detailed legal document. Our suggested approach in order for you to fully understand the Distribution Plan is to first read the Explanatory Statement, then the Distribution Plan Flowchart and Frequently Asked Questions, and finally the Distribution Plan itself.

The JSAs’ team are available to answer any queries you may have regarding the Distribution Plan or associated documents, but please note we do expect phone lines to be busy over the next few weeks. If you are happy to, please email the JSAs’ team setting out the details of your query and one of the team will contact you to discuss at the earliest opportunity.

Email: WealthTekClients@bdo.co.uk
Telephone: +44 (0)113 521 4470 or +44 (0)151 351 4700


12 February 2024 - Update to Clients

As Clients will be aware, the Joint Special Administrators (“JSAs”) have been working to produce the Client Assets Statements which detail, on an account basis, each Client’s claim to Client Assets and their Client Money Entitlement. The Client Assets Statements also set out the anticipated level of recovery of Client Assets and any resulting shortfall claim.

The JSAs have provided Clients with the option of receiving their Client Assets Statements either through an online Client Portal or in hardcopy by post.

For those Clients who opted to receive their Client Assets Statements through the online Client Portal, you will have received an email during the week commencing 5 February 2024 providing you with access to your Client Portal. You will receive an email during the week commencing 12 February 2024 informing you that your Client Assets Statements are now available on your Client Portal.

If you have opted to receive your documents in hardcopy by post, your documents will be sent out in the week commencing 12 February 2024.

The JSAs’ team are available to answer any queries you may have regarding your Client Assets Statements, but please note we do expect phone lines to be busy over the next few weeks. If you are happy to, please email the JSAs’ team setting out the details of your query and one of the team will contact you to discuss at the earliest opportunity.

Email: WealthTekClients@bdo.co.uk

Telephone: +44 (0)113 521 4470 or +44 (0)151 351 4700


6 October 2023 – Notice to Clients

Clients and creditors may be aware that Vertem Asset Management was a trading name previously used by the LLP.

The Joint Special Administrators (“JSAs”) have become aware that the website: www.VertemAssetManagement.com, which was previously used by the LLP, has recently become active following the expiration of the LLP’s registration of the domain name.

Please note that this website and/or the entity that has acquired the registration of the domain name, has no connection or affiliation with the LLP or the JSAs.

Clients and creditors of the LLP seeking information regarding the Special Administration of the LLP are advised to contact the Joint Special Administrators directly using the previously provided contact details, which are repeated below:

Postal address: WealthTek Team, BDO LLP, Business Restructuring, 5 Temple Square, Temple
Street, Liverpool L2 5RH
Telephone: +44 (0)113 521 4470 or +44 (0)151 351 4700
Email: WealthTekClients@bdo.co.uk or WealthTek@bdo.co.uk


6 April 2023 – Notice of appointment of Special Administrators

With effect from 6 April 2023, WealthTek Limited Liability Partnership (the ‘LLP’ or ‘WealthTek’), trading as Vertem Asset Management and Malloch Melville, has been placed into Special Administration following an application to the High Court by the Financial Conduct Authority (‘FCA’). Shane Crooks, Mark Shaw and Emma Sayers, licensed insolvency practitioners from BDO LLP, have been appointed as Joint Special Administrators (the ‘JSAs’).

The Special Administrators are now responsible for the affairs of the LLP.

In accordance with the statutory objectives contained within the Investment Bank Special Administration Regulations 2011 they must: (i) ensure the return of client assets as soon as reasonably practicable; (ii) ensure timely engagement with market infrastructure bodies and authorities; and (iii) either rescue the firm as a going concern or wind it up in the best interest of the creditors. Further information in respect of the Special Administration and what this means for clients and creditors of the LLP, together with some FAQs, is provided below.

The Joint Special Administrators will be writing to all clients and creditors of the LLP. If you have any queries in respect of the appointment of the Joint Special Administrators or your claims against the LLP, please contact: WealthTekclients@bdo.co.uk.

The LLP remains regulated by the FCA, albeit certain restrictions are now in place to prevent WealthTek (including under its other trading names) from undertaking any regulated activities. The Joint Special Administrators are working closely with the FCA as they carry out their duties. On 4 April 2023, the FCA imposed requirements for the LLP to immediately cease carrying on all regulated activities for which it has a Part 4A permission (other than where it has express written consent of the FCA).

Under the provisions of paragraph 100(2) of Sch. B1 to the Insolvency Act 1986, as applied pursuant to regulation 15 of the Investment Bank Special Administration Regulations 2011, the Joint Special Administrators carry out their functions jointly and severally and any one or more of the Joint Special Administrators has exclusive power to exercise any function. The Joint Special Administrators act as agents of the LLP and without personal liability.

Please note that Shane Crooks, Mark Shaw and Emma Sayers had previously been appointed as Joint Interim Managers with effect from 4 April 2023. Their appointment as Joint Special Administrators has superseded their previous appointment.