A new joint lawsuit against Link Fund Solutions has been filed by law firms that were previously pursuing separate class action cases over its administration of the collapsed Woodford Equity Income Fund, which was revealed today as having decreased in value by another 13% since April.
This comes as Link provided an update for investors that the value of the remaining assets in the LF Equity Income Fund, as it is now called, had decreased to £118.5mln as of today.
Since gating the fund three years ago, Link has made four capital distributions to investors which amount to a total of £2.54bn but has paid out nothing since December 2020.
Earlier this month, law firm Harcus Parker sued Link, the authorised corporate director of the fund, for £18mln on behalf of 1,500 investors.
Today, Harcus Parker is joining forces with Leigh Day, which filed a separate class action suit against Link last year, to file a joint application to the High Court for a group litigation order against Link.
The application is expected to be heard over two days in October, according to the firms.
A joint claim will meet the court’s objective of “dealing with cases proportionately in a way that saves expense”, the pair said in a statement.
Leigh Day solicitor Meriel Hodgson-Teall said: “Hundreds of thousands of ordinary people have lost significant amounts of their life savings investing in this fund. We contend this is a direct result of Link’s management.”
Daniel Kerrigan, a senior associate at Harcus Parker, said: “We invite all investors who have not signed up to the claim to do so.”
Meanwhile, Link reported another decrease in the value of the fund's portfolio.
This followed a decision by Link to write down the value of shares in Rutherford Health 41.5% to 38p per share as a result of "increasing uncertainty on the future viability of the company".
In April the fund’s NAV had increased to £145mln at the end of April on the back of an uplift in the valuation of its shareholding in Benevolent AI, following its listing on Euronext that month.
But this week, Rutherford Health appointed an official receiver to liquidate the company, leading Link to revalue the holding to zero.
Link said it and other shareholders in Rutherford had provided bridging finance to enable it to explore longer-term funding options.
While a "significant number of parties were approached" and "substantive discussions took place" with one third party, a deal could not be reached, Link said.
"At this stage we are unsure as to what value, if any, is recoverable, however we will endeavour to recoup as much as possible for the fund."