Fluid ISA Bond

masonic

jimjames said:

Fluid ISA 1 Ltd is fully owned by Fluid ISA PLC. If you look at Companies House then you can see that they include the statement:

The compartmentalised nature of the group means that separate investments into subsidiaries can be ringfenced ... protecting any weaknesses and ensuring rewards are only shared with the relevant investors.

https://find-and-update.company-information.service.gov.uk/company/11212930/filing-history

This would suggest that the structure is deliberate to allow the companies to go bust once profits taken and avoid the holding company being impacted

Fluid ISA Bond 1 has shareholder assets of £200k
Fluid ISA Bond 2 has negative shareholder assets of -£40k
Fluid ISA Bond 3 has been dissolved

I'm not sure it suggests exactly that. A typical structure of an investment provider is to have an operating company with one or more security trustee companies that hold investor assets. The security trustee companies pay a management charge to the operating company to manage the assets, and the directors and creditors of the operating company cannot call upon assets held within the security trustee companies under any circumstances. This protects investors in the situation one or more of the companies goes bust. Above this, they have placed a holding company and separated the assets via a third party nominee, but presumably the contract with bondholders is between them and Fluid ISA Bond 1 (or 2). The shareholder assets you quoted are therefore a red herring.

Looking at Fluid ISA Bond 1 Limited, the most recent accounts indicate £2.7m in debtors, which is accompanied by a legal charge from More Group Capital Services Limited, itself described as the Security Trustee in the charge. More Group is there to hold assets in relation to bonds issued by Fluid using Northern Provident (currently in liquidation) for the ISA wrapper. Fluid ISA Bond 2 Limited used Goji as their ISA manager, but essentially has the same structure. Fluid ISA Bond 3 appears to have been set up for the future, but the directors applied for it to be dissolved back in April (not a good omen).

The structure is therefore as follows

Fluid Trust plc (holding co)
- Fluid ISA Limited (topco)
-- Fluid ISA Bond 1
--- More Group (Security Trustee)
--- Northern Provident (in liquidation, former ISA manager)
-- Fluid ISA Bond 2
--- More Group (Security Trustee)
--- Goji (ISA manager)
-- Fluid ISA Bond 3 (not used)

Whereas what you would normally see is

Operating Co
- Security Trustee 1
- Security Trustee 2
...

The first structure immediately creates a problem in that for proper ring-fencing, the security trustee should hold assets for a single company, so that it can be put into administration along with the operating company. Administrators can then manage the group of companies, are empowered to release assets to satisfy investor claims, and are able to apportion their fees between the companies.

If the operating company alone were to be put into administration, and it has insufficient assets, then the administrator may find the service charge levied against the security trustee to be insufficient for the work they need to do to realise assets, and may not have enough company assets to fall back on. If the company assets prove insufficient, not a lot is going to get done! Even less than usual.

Since there does not appear to be any FCA authorised firm connected with this group of companies, it would appear that this is what is known as an unregulated collective investment scheme (incidentally, I didn't think such a scheme was ISA eligible). Bondholders may therefore need to bring legal action against Fluid in order to force it into compulsory liquidation or administration. A reputable company would not let things get to that stage, hence my comment about this being a bad sign.

This is just my take on the situation, happy to be corrected if anything is inaccurate.

jimjames

Thanks Masonic. For clarity Fluid ISA Ltd is now listed as dormant in their latest accounts.

masonic

jimjames said:

Thanks Masonic. For clarity Fluid ISA Ltd is now listed as dormant in their latest accounts.

Yes, I noticed that. Fluid ISA Limited has been dormant since it was incorporated according to its own filings. That's not unusual for a holding company. Dormant is defined in the Companies Act as applying to companies that don't have any "significant accounting transaction". It's stated in the accounts of Fluid Trust plc that "Fluid ISA Limited owns 100% of the issued share capital of Fluid ISA Bond 1 Limited, Fluid ISA Bond 2 Limited and Fluid ISA Bond 3 Limited" making them subsidiaries of Fluid Trust PLC (which owns 100% of Fluid ISA Ltd). In other words it is dormant because it is just holding share capital and is the middle link in the chain.

This is also shown by the "-" in the % Held Direct column of the Subsidiaries section of Fluid Trust's accounts.

pbell

Just received a letter from liquidators of the whole of the Fluid Group although tellingly it is not all the companies within the group and looking at the accounts on Companies House the whole thing is a maze of intercompany transactions. I take it my money is lost, despite a statement in January of the value of the bond. Someone has obviously made a lot of money from this. I intend to volunteer for the creditors committee to try and find out who.

emz1968

Our Bond was due to be released just after they went into liquidation.  To say we are pis*ed off is an understatement.
I’ve got Mahmood’s number.  I’m so tempted to call it 😡

masonic

It's not clear whether liquidation has commenced yet. Typically creditors are given 7 days notice ahead of liquidation and may request a meeting to vote on the liquidation. The only indication that creditors have been notified is two posts above, dated 6 days ago. There has been no notification in the Gazette, so the company was not in liquidation as of 18th March.

It is odd, since it has been over 7 weeks since the IPs were called in, and it normally takes about 2 weeks to put a company into liquidation, and a further 2 weeks for the official record to reflect that.

emz1968

Has anyone received an email (supposedly) from Fluid ISA through Mimecast.com? Its talking about making a claim. My partner has had two emails, another one from webmaster @insolvencydata.co.uk saying it’s from Leonard Curtis.  Looks dodgy to me 🧐