The voluntary liquidators of New World Holdings, the parent company of failed Cayman crypto funds managed by Invictus Capital, have petitioned the Grand Court to supervise the liquidation.
This has become necessary because the company’s sole director is unwilling to sign a declaration of solvency.
The petition, filed by Alexander Lawson and Barry Lynch of Alvarez & Marsal in Cayman on 6 July, describes New World Holdings as “a holding company for a range of investment management businesses including lnvictus Hyperion, lnvictus Asset Management Limited, lnvictus Alpha Limited and lnvictus Capital Financial Technologies SPC (and its segregated portfolios), all of which are involved with investing in cryptocurrency assets”.
Invictus Capital suspended redemptions for its crypto funds in May after two funds, Bitcoin Alpha and Stable Growth, suffered steep losses from the collapse of stablecoin TerraUSD.
Two other Invictus Capital funds, Crypto20 and Crypto10, were affected by crypto lender Celsius’s halt to redemptions, where they are holding a significant portion of their assets.
The funds are all segregated portfolios of New World Holdings’ lnvictus Capital Financial Technologies SPC.
The company indicated that the Bitcoin Alpha and Stable Growth funds will be closed down, while efforts would be made to sell Crypto20 and Crypto10 to another manager.
As at 4 June 2022, all the shares of the company were held by four individual shareholders and one trust, the liquidators said in their court filing.
In a notice informing the shareholders of the petition, the liquidators said, although the declaration of solvency was not signed, “this does not definitively imply that the Company is insolvent on a balance sheet basis and there remains the possibility that the Company may be able to realise sufficient value from its assets to pay distributions to contributories.”
If the petition to the Cayman court is successful, the liquidators noted that they would become joint official liquidators (JOLs) and as such will “have expanded reporting duties to investigate the reason for the Company being wound up and to report to stakeholders (and the Grand Court) on the outcome of those investigations”.
If placed into official liquidation, they wrote, the company would benefit “from relief in the form of a statutory moratorium that, inter alia, precludes any legal action from being taken against the Company without first obtaining leave from the Grand Court.
“The JOLs are also responsible for contacting all of the Company’s known creditors and advertising for creditor claims with the view to adjudicating those claims and distributing the Company’s realised assets, net of costs, to the Company’s creditors on a pari passu basis,” the notice added.
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