The taxpayer-funded liquidation of an island-based investment fund rumbles on.

An update has been sent by liquidators to shareholders and creditors of New Earth Recycling and Renewables (Infrastructure) Plc.

NERR was wound up by the Manx authorities in June 2016. It was part of the New Earth Group of Funds, which invested in recycling plants in the UK.

The group was managed and promoted by Premier Group (IoM), which went into voluntary liquidation in November 2016.

Together with its two feeder funds, NERR had some 3,249 investors and had been valued at $292m. But when the company folded, the value of those investments was close to zero.

liability

Liquidators are investigating the reasons for the failure to see whether liability can be attributed to any party and if a viable claim can be made.

Since their last update in January, joint liquidators Alex Adam and David Craine said they have continued to engage in written correspondence with the former directors of the company.

Last year, the liquidators of NERR failed in a legal bid to question former directors John Bourbon and Michael Richardson under oath after they declined to be interviewed. In their letter to creditors, Mr Adam and Mr Craine said they have continued to progress investigations into the roles of other advisers to the company.

They had written to these other third parties and have now received responses ’which we are considering together with our legal advisors,’ they said.

The liquidators are also considering a claim for restitution or damages against an Isle of Man-based service provider.

They said they are continuing to seek clarification from the office-holders of the potential defendant as to the position of their insurers - who would likely be the source of recovery in the event of a successful action being brought.

’We note it would not be in creditors’ or investors’ interests to pursue any claim against parties without confidence that those parties had the means to satisfy any eventual award,’ they added.

The Financial Services Authority last year declined to reveal how much had been spent on the liquidation of this and other failed investment funds linked to the Premier Group.

But the Examiner reported in July 2018 that liquidators’ fees and expenses in the taxpayer-funded winding up of NERR had by that date totalled more than £374,700.

The liquidators said in their latest update that there has been no change in the funding arrangement with the FSA but noted this is under constant review and can be withdrawn at any time.