A limited number of customers of failed currency firm Crown Currency Exchange who sent back unspent overseas money they'd bought from the firm will be refunded. The cash will be returned in full in sterling at the current exchange rate.
Liquidator Duff & Phelps (D&P), formerly MCR, made the announcement today in what marks the first group of creditors to receive some money back after Crown went into administration in October 2010, owing £20 million to customers. D&P decided to give this 'buy back' cash back due to the low level of claims and to minimise costs. It is unclear how many are in this group but D&P says the number is "small".
The majority of the 13,000 affected customers who never got the currency they bought are still in limbo. Most are owed between £100 and £20,000 but it is unclear how much they will get back. A High Court hearing is scheduled for April to determine the status of Crown's remaining cash.
Liquidator's full statement
D&P's full statement says (we've added explanations in square brackets): "As creditors will be aware, at the directions hearing which took place before Mr Justice Briggs on 9 December 2011, the various stages for evidence to be provided in relation to the trust monies application was set out.
"The court has since confirmed that the one day final hearing of the trust monies application [the rest of Crown's money] has been fixed in a three day window from 24 April 2012, meaning that the final hearing is likely to take place on either 24, 25 or 26 April 2012. The Court will normally confirm after 2pm the day before, the exact day when the matter is to be heard at court.
"Since the last court hearing, the joint liquidators have determined to distribute the 'buy back monies' to the buy back creditors.
"The principal reasoning for this decision is that at the time of the directions hearing on 9 December 2011 inquiries would have had to be made by Edwin Coe LLP [a law firm that represents the Crown Currency action group] thereafter in order to identify a representative to act for the buy back creditors in relation to the trust funds application.
"Given the value of funds involved, it was considered inappropriate for a substantial portion of the buy back monies to be potentially used up in trying to identify a creditor to represent that group of creditors at court. Therefore, for these commercial reasons, the joint liquidators resolved to return the buy back monies' in their entirety to those creditors.
"Please note that this is not a dividend distribution to non-preferential unsecured creditors.
"As such, the final hearing will proceed now solely in relation to the Barclays monies [Crown used Barclays as its business bank account provider] and the completed orders monies.
"At the final hearing Edwin Coe LLP and its counsel will present argument to the court for the existence of a trust/proprietary claim over the Barclays monies and/or the completed orders monies.
"The liquidators' solicitors and counsel will present argument to the court against the existence of any such trust/proprietary claim, so all relevant arguments are presented to the court in order for it to make its final determination of the issues.
"The joint liquidators shall advise creditors of the date of the final hearing as soon as that information is made available to them."