When a firm liquidates a fund, there are three options to take in regards to class action filing:

  • Continue to monitor and file claims
  • Cease filing immediately
  • Sell the recovery rights to a third-party

Each firm should determine their desired approach to liquidating funds.

Continue to monitor and file claims
Pros Cons
Potential recovery opportunities for the next 7-10 years

The money recovered after the fund liquidates can be substantial

How do you distribute the recoveries? Will you distribute the monies to all historical shareholders?How will you keep track of the contact details for all final shareholders for the next 7-10 years?

What if checks sent out to the final shareholders are not cashed?

Who carries the cost of continuing to file? Is it evenly distributed to the active funds? Is that fair?

Cease filing immediately
Pros Cons
Significantly shorter window of future recoveries to distribute

No direct on-going fees for the active funds to cover

Potentially substantial value/recoveries left on the table
Sell the recovery rights to a third-party
Pros Cons
Immediate money for investors

No on-going fees for the active funds to cover

No issues with distribution of future recoveries to investors

Potentially selling the rights for less than what ends up being recovered over the next 7-10 years

Recovery Solutions Capital reviews historical and estimates future recovery potential to determine a fair, equitable bid to help provide capital today to investors.

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