CASS Notice

IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES COMPANIES AND INSOLVENCY LIST (CH.D.)

Sova Capital Limited – In Special Administration (“the Company”)

Case No. CR-2022-000596

Company Number: 04621383

Registered Office Address: c/o Teneo Financial Advisory Limited The Colmore Building, 20 Colmore Circus Queensway, Birmingham, B4 6AT

As you may be aware, the Company was placed into Special Administration on 3 March 2022, and David Philip Soden, Ian Colin Wormleighton and Stephen Browne of Teneo Financial Advisory Limited were appointed as Joint Special Administrators (the “Joint Special Administrators”).

The Joint Special Administrators hereby notify Clients of an application to Court made by the Joint Special Administrators for approval in relation to the setting of a Hard Bar Date in respect of Client Money, pursuant to Regulation 12C(3) of the Investment Bank Special Administration Regulations 2011. The Joint Special Administrators have also applied to Court for approval of a “Claim Adjudication Procedure”.

Clients who have already submitted Client Money statements to the Joint Special Administrators are not required to take any action in relation to the Court application.

Hard Bar Date Application and Claim Adjudication Procedure

The Joint Special Administrators have now concluded that they have taken all reasonable measures to identify and contact Clients who may be entitled to the return of Client Money and that, if a Hard Bar Date is set, there is no reasonable prospect that the Joint Special Administrators will receive claims for the return of Client Money after that date.

In light of this, the Joint Special Administrators have applied to Court for approval in relation to the setting of a Hard Bar Date in respect of Client Money, pursuant to Regulation 12C(3) of the Investment Bank Special Administration Regulations 2011. The Joint Special Administrators have also applied to Court for approval of a “Claim Adjudication Procedure”. More information about the  consequences of the Court application is set out below (see “Consequences of the Application” below). A copy of the Application is enclosed with this letter.

The Court hearing has been listed in a floating three day window commencing on 2 October 2023 and is currently expected to be held in the High Court of Justice, Business and Property Courts, Insolvency and Companies List. The Joint Special Administrators anticipate that the Court will confirm the date and timing of the hearing on or around 25 September 2023. Once confirmed, the date and timing for the Court hearing will be published on the Business and Property Courts Rolls Building Cause List, which can be accessed via the following link:  https://www.justice.gov.uk/courts/court-lists/list-cause-rolls2#Insolvency.

Clients are not required to attend the Court hearing, but may do so if they wish. If any Clients wish to obtain further details regarding the hearing with a view to attending the hearing or otherwise, they should contact: CASS.SovaCapital@teneo.com or crm@sovacapital.com. If you would prefer to contact us by post, you may contact us at the following address: Teneo Financial Advisory Limited, The Colmore Building, 20 Colmore Circus Queensway, Birmingham, B4 6AT.

Consequences of the Application

If the Court grants approval to the Joint Special Administrators to set a Hard Bar Date, then the Joint Special Administrators intend forthwith by notice to set a Hard Bar Date, which shall expire 28 days following such notice. The effect of the Hard Bar Date pursuant to The Investment Bank Special Administration Regulations is that:

• for a final Client Money claim to be met by the Joint Special Administrators, it must be received by the Joint Special Administrators prior to the expiry of the Hard Bar Date;
• any final Client Money claim received after expiry of the Hard Bar Date will rank as an unsecured claim;
• after the expiry of the Hard Bar Date, the Joint Special Administrators may, in accordance with client money rules, transfer to the Company’s own bank accounts (i.e. the house estate) any balance of the Client Money pool which the Company holds after the return of Client Money to eligible claimants, and may not meet any further final money claims.

Clients who have not yet engaged with the Joint Special Administrators in respect of the return of their Client Money and/or who have not provided their Client Money statements to the Joint Special Administrators are urged to contact the Joint Special Administrators and/or provide such Client Money statements as soon as possible.

The Joint Special Administrators have also applied for the Court’s approval of a Claim Adjudication Procedure, which applies to Client Assets and Client Money. In relation to creditor claims (i.e. against the house estate, and not Client Money or Client Asset claims pursuant to CASS) there exists a mechanism under the relevant insolvency legislation for the Joint Special Administrators to adjudicate proofs (i.e. admit them, in whole or in part, or reject them). However, in relation to Client Money and Client Asset claims, no such mechanism exists either under insolvency legislation or CASS. As such, the Claim Adjudication Procedure establishes a mechanism whereby, among other things:

• the Joint Special Administrators will be able to adjudicate Client Money and Client Asset claims; and
• Client Money and/or Client Asset claimants will be able to appeal a decision of the Joint Special Administrators in respect of their client asset proof, in a manner similar to the mechanism provided for creditor claims against the house estate under Rule 157 (Appeal against decision on proof) of The Investment Bank Special Administration (England and Wales) Rules 2011.

Next steps

If the Court grants the relief sought, then the Joint Special Administrators intend, subject to the Court’s directions, to:

• forthwith by notice set a Hard Bar Date, to expire 28 days following the giving of such notice.
• use the Claim Adjudication Procedure to adjudicate Client Money and or Client Asset proofs in circumstances where Client Money and/or Client Asset claimants have submitted Client Money and/or Client Asset statements with which the Joint Special Administrators do not agree.

Should you have any queries or questions in relation to this letter, please contact the Company as follows:

Email: CASS.SovaCapital@teneo.com or crm@sovacapital.com

Post: Teneo Financial Advisory Limited, The Colmore Building, 20 Colmore Circus Queensway, Birmingham, B4 6AT.

Clients who have not yet engaged with the Joint Special Administrators in respect of the return of their Client Money and/or who have not provided their Client Money statements to the Joint Special Administrators should therefore contact the Joint Special Administrators as soon as possible.

David Philip Soden, Ian Colin Wormleighton and Stephen Roland Browne (the Joint Special Administrators of Sova Capital Limited).

The Joint Special Administrators act as agents of Sova Capital Limited without personal liability.