Liquidation Frequently Asked Questions
Cathedral Core Services LP (In Liquidation) is a limited liability partnership registered in New Zealand that was placed into liquidation by resolution of its partners pursuant to Section 88(1) of the Limited Partnership Act 2008 (“the Partnership Act”). The process began on September the 1st 2016 and the Insolvency Practitioner, Maria Escudero was appointed as liquidator of the partnership.
Cathedral Core Services LP (In Liquidation) was member of the Cathedral Financial Group of Companies including Cathedral Investment Bank. As a result of this liquidation Cathedral Investment Bank agreed with the Liquidator and Creditors to repay all liabilities associated with this liquidation and has provided us assets in the form of land for liquidation that are valued at more than double the initial estimation of liabilities as requested by the liquidator. The rights of that land are being transferred into a Special Purpose Vehicle in the form of Trust (“The SPV” or “The Trust”) that is owned, controlled and managed by Creditors, the rights that each Creditor have in the SPV were given to them in a Pro Rata basis based on their claimed amount.
After analyzing a variety of jurisdictions as outlined in the 3rd and 4th Report the incorporation of the Trust where assets were deposited for repayment is based and supervised in the same Jurisdiction where the bank is currently regulated which allows us to maintain both Confidentiality and Ease of Management considering the complexities of the process.
The SPV was incorporated in the form of a Trust which is managed by Creditors via various committees that manage and supervise the management of the Trust (“Creditors Committees”). The highest administrative body within the Trust is the Executive Committee formed initially by Creditors. The Trust controls all assets that are being deposited for repayment and was registered under the name “CCS Liquidation Trust INC.” With Incorporation Number (2018/C0238).
All creditors that have submitted a valid ACF and A1 Formats and who are not on the Bank´s Legal Action Watch List are being credited their rights (“Controlling Position”) at 100 cents on the dollar (in full). At this stage the liquidator along with the Creditor Committees are reviewing the final documentation and procedures for the finalization of this process. All Creditors having a controlling position can exit the Trust at any time if they wish to do so as per the information contained herein and the specific Rules set out in the Incorporation Documents of the Trust.
Creditors remaining in the Trust will likely obtain a higher amount than their initially claimed amount as we expect the underlying asset to increase the total value of the Trust when both a recent valuation is performed and when management actions are implemented, The trust Assets have a Currency Exchange Exposure as land is denominated in a foreign currency.
If I have an affected account how and when will I get repaid?
If you have one of the 324 affected accounts and you have submitted a valid ACF and A1 Formats for processing you are being given control on the Trust for the total value of your claim of the underlying assets via a Controlling Position in the form of Preferential Shares. Shares and the underlying Physical Assets could be transferred or Sold under your instructions at any time.
This means you can exit the vehicle now if you decide to do so by selling your position or transferring the title or rights of the portion of the land that you control to any other third party, that portion is valued at your claimed value submitted under your name. If you would like to exit by any of these options you need to request this to the Liquidator (if at an early stage) or to the Executive Committee of the Trust (if later). When transferring land rights it is possible that you will have to pay transfer costs including, without limitation, Taxes and inscription fees as per applicable law (see below).
If you remain in the Trust then the Trust managers have the mandate of repaying you in cash the full value of your Controlling Position. This will happen when the assets are sold or when cash is realized via the various strategies outlined in the Trust´s Incorporation documents.
The Controlling Position that you hold in the Trust is also transferable thus you can transfer or pool that with any third parties as per the various strategies established by the Executive Committee or any other third party. The Trustee and the Creditors’ Committee are jointly preparing a Prospectus which will aid in the commercialization and distribution of Controlling Positions. This will be made available shortly.
What if I would like to transfer the Assets under my Name?
You could transfer the assets into your name by transferring the Rights or the Title at any time. The difference is that if you transfer the Title, taxes, inscription fees and any associated cost will be due immediately after the transfer. It is likely that other taxes, inscription fees and costs will apply for subdivision, if you only transfer the Rights only notary costs will need to be paid. In both cases you will be individually owning that portion of the asset which could be sold, transferred or mortgaged. You should take your own advice regarding the practical impact of taking any action.
In any situation you will be responsible for taxes as per applicable regulations and you should confirm your specific tax status with your tax specialist.
All costs that are not related with taxes that could occur as a result of subdivision from the Main Asset could be subject to repayment by the Trust. Please approach the Executive Committee in this regard as provisions were made in the incorporation documents to provide this to parties wishing to exit. Please note that Taxes, Inscription Fees or Notary Costs are not included in this provision.
The Executive Committee will publish rules regarding which part of the land will be made available for immediate cash out giving priority to Creditors remaining in the structure for repurchase in cash.
What if I would like to transfer the Controlling Position that I hold under my Name?
If you have any party interested and you wish to sell or transfer your Controlling Position you can do so immediately as provisions were made for immediate cash outs.
Registering the transfer is done by the Executive Committee or the Trustee with the registry in the jurisdiction where the Trust is regulated. You should contact the Executive Committee or any designated agent to do this transfer for you.
You should consider the impact, currency exchange rates and the correct timing for cash outs as this could impact the value you receive for your Controlling Position. Because the plot of land is part of a larger Real Estate Project that a Realty Branch of The Bank is managing it could be possible to get more value for the position you hold as the time passes.
The Bank has provided us with contacts to more than 400 Investment Funds that specialize in routinely investing in assets similar to those that the Trust hold and the Executive Committee will be in charge of facilitating this procedure.
Please remember to review any tax implication that could apply to your specific case, although the Trust is registered in an offshore Jurisdiction where no tax needs to be paid it is likely that you will need to pay tax in your country and provisions should be observed as per applicable regulation and your specific tax status with your tax specialist.
Is there an upside potential? If so how much is being estimated?
As with any Real Estate investment there is risk but structuring has been done since the beginning to allow and promote an upside potential for the valuation of the Trust and its assets with its consequential capital gains for anyone having a Controlling Position in it. Right now the Trust’s main asset is Land that has not been developed and where services are yet to be deployed. Because of this any action taken by the Executive Committee, the Bank or the Management team relating to the land will likely have a direct impact on the valuation of the Asset that will result in a substantially increased value, although this is not guaranteed.
Because the land is located in an industrial area near one of the largest Car Manufacturers in the Country and where important housing requirements are needed the upside potential for valuation is relatively high. Furthermore, due to the land not being developed when the initial valuation we had for the incorporation was marginal and outdated. This Marginal Valuation was used to assign Controlling Positions thus it is expected that when the new valuation is performed all values should have increased.
We expect that any controlling positions will increase in value as the land will be subject to natural capital gain increases in a place like this.
Facts and Benefits of the Structure
The Trust management along with anyone related to it or having a controlling position and involved in such management occur under the strictest confidentiality and privacy rules as stipulated by the legislation which is also reinforced in the Incorporation Documents.
Subject to any specific restrictions on the International Securities Market, Structuring allows for any investment fund or any professional investor to buyout anyone holding a Controlling Position, because of the upside potential of both the area and the project being managed by the Bank.
Intermediaries, Agents and Legal Advisors
Although we welcome legal advisors to supervise and help you with the process, it is important to note that this procedure, including, without limiting, any action related with this liquidation or the Trust should be undertaken directly by the Creditor (without limitation not employees, brokers, intermediaries, dealers, Investment Advisors, Legal Representatives or third parties). No third party shall be able to step in or intervene in such procedures. We welcome Creditors to seek independent legal advise for any stage of this liquidation. If you require additional help with the Trust you can request this via the Executive Committee of the Trust.
Help will also be provided in other languages depending on your nationality, as of now we are advising creditors in English and Spanish as per their requests.
Does my account have anything to do with Cathedral Investment Bank?
Although you may have a separate account with Cathedral Investment Bank or CIB Americas Bank Inc, all accounts and entities are completely separate from Cathedral Core Services LP (In Liquidation). This means that if you have an account with Cathedral Core Services, such accounts are not related to Cathedral Investment Bank CIB Americas Bank Inc. in any way except through the use of Cathedral Investment Bank’s Systems Platforms AML, KYC procedures or Service Contracts between the entities.
Is there a possibility of losing Money during this process?
We ask creditors to please follow the procedure to avoid any risks regarding capital loss. If you are inexperienced or feel that do not have the right advisory team behind you to exit the strategy now you should remain onboard until repaid with cash as early exits could result in third parties buying both the underlying asset or your controlling positions at a much lower price than the real market price. The Liquidator has confirmed that Cathedral Investment Bank / CIB Americas Bank Inc. is willing to resolve issues, if any, with the contract signed regarding this repayment as provisions were taken to guarantee such value, and that the parties involved will stand behind the total value of the transaction and all accounts reported as a result of this Liquidation when a valid claim was submitted.
Steps were taken to guarantee creditors the repayment of such assets via the procedures established, thus anyone involved in the Trust are advised to remain on board, and all contracts that were entered into in this context allow us and the Trust to claim any deficiencies that could arise or be found in the future for this process, if any.
Some of the risks that also need to be considered are any currency exchange risks that could reduce the value of the land against the US Dollar and any Geopolitical Risks inherent given the location of the assets.
If you are interested and would like to know more about the Trust we suggest you request the General Information Dossier from the Liquidator or the Executive Committee. For reference we have prepared the following summary:
The Trusts has the following parties:
- Appointor The Appointor is whomever grants the assets for the trust formation, in this case the Settlor is Cathedral Investment Bank / CIB Americas Bank Inc. (“The Bank”) who has transferred the rights to the Assets in form of land.
The Trustee is appointed to act as custodian of the said property and any assets related with this Trust or any dependent vehicle, it has a supervisory role. Initially the liquidator will act as a Trustee to oversee the finalization of the incorporation and proper operation of the Trust.
- Executive Committee:
This is a Committee formed by the Trustee that manages the structure and manages the assets, among other functions the Executive Committee supervises all other committees except the Audit and Supervisory Committee. The Executive Committee is formed initially by Creditors that have requested the Liquidator to participate in the Creditors’ Committees. Roles within the committees are being assigned initially by the Liquidator and the Executive Committee will have the responsibility of modifying such roles or assignments as it deems appropriate.
- Audit and Supervisory Committee:
This is an independent Committee that reports to the Trustee and supervises all actions undertaken by the Executive Committee, it is also including Creditors that have an accounting or auditing background.
- Trust Deed
This founds the Trust and includes clauses on asset management and the duties and obligations of the Trustee.
- Shareholders (Beneficiaries)
Anyone that holds a Controlling position of the Trust, often also called beneficiaries.
- Trust Prospectus
This is a document that clearly defines specifics of the Trust disclosing Risks and Benefits of holding controlling positions over the Trust. This document is intended to aid Shareholders and Beneficiaries to sell their controlling positions and to aid the bank to promote those shares on the Secondary Market.
What can I do if I have further questions?
If you would like to submit enquiries or comments you can at firstname.lastname@example.org Furthermore, although not related, the Cathedral Investment Bank, ICSC (International Customer Service Center) will continue to provide services and assistance to Creditors regardless of the liquidation of Cathedral Core Services. Please note that when using the bank for any purpose including assistance all information could be shared by the liquidator with their Customer Service Unit for convenience.
I am an Employee Supplier or a Secured or Unsecured Creditor and did not subscribe to the liquidation in time.
If you are a supplier or a regular creditor (Secured or Unsecured) and you did not submit a regular claim before 31th of March 2017 you need to contact the liquidator at email@example.com immediately.
The Standardized Claim Formats for Creditors can be downloaded at www.cathedralcore.com/claimsf.pdf
The liquidator is conducting this liquidation in English and official communications are done in this language, we do, however, expect creditors from several jurisdictions to request clarifications in their language, we are providing creditors with a translation or summaries when needed in their own language. We understand that some of those creditors will not be familiar with the specifics of certain legal or specialized terminology in English and for this reason we continue to be prepared to provide general information on whatever subject and the process itself in those languages. If you do require assistance we will gladly provide whatever information you may require in any other language.
Cathedral Core Services LP (in Liquidation)
c/- McDonald Vague Limited