When a firm liquidates a fund, there are three options to take in regards to class action filing:
Each firm should determine their desired approach to liquidating funds.
|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?
|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|
|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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