LM Wholesale First Mortgage Income Fund
Trilogy is the Responsible Entity for the LM Wholesale First Mortgage Income Fund. If you’re currently a unitholder, please see below all relevant updates. For more information, check out the LM First Mortgage Income Fund website.
Final Payment
The final payment of claimed money from the LM Wholesale First Mortgage Income Fund (Scheme) to investors occurred on 05 March 2025, with unit holders receiving approximately $0.00447 per unit held. For the avoidance of doubt, there will be no further payments from the LM Wholesale First Mortgage Income Fund.
Unclaimed Money
Trilogy Funds will now commence the process of transferring all remaining unclaimed money to ASIC for administration. We estimate that this process will be completed approximately 30 business days from the date of payment. Please note that this is an estimate only and is subject to change. Please continue to monitor the Trilogy Funds website for all material updates. If you believe you have unclaimed money, you will need to submit a claim directly to ASIC once the transfer has been completed. Trilogy Funds is not liable to any person who did not receive a payment due to a failure to provide the correct payment details to Trilogy Funds. For further information on how to make a claim to ASIC for unclaimed money, please visit the unclaimed money section on ASIC’s website or call ASIC on 1300 300 630.
Final Payment
Trilogy Funds Management Limited (Trilogy Funds) is pleased to confirm that the final payment from the LM Wholesale First Mortgage Income Fund (Scheme) will be processed in the week commencing 3 March 2025.
The final payment will amount to approximately $0.00447 per unit.
Unclaimed Money
If you did not receive the interim payment made in December 2024, it is likely due to invalid payment details being held on file. To ensure you are able to receive the interim and final payments, please ensure your payment details are updated by 5:00pm on Friday 28 February 2025. You can update your details by contacting Trilogy Investor Relations on 1800 230 099 or at [email protected].
In accordance with s601NG of the Corporations Act 2001 (Cth), after the final payment is made, Trilogy Funds will transfer any unclaimed money remaining to ASIC for administration. Once this occurs, you will need to submit a claim for the unclaimed money directly to ASIC. Trilogy Funds will not be liable to any person who did not receive a payment as a result of his or her failure to provide Trilogy Funds with correct payment details within the time frame stipulated above.
For further information on how to make a claim to ASIC for unclaimed money, please refer to ASIC’s website at https://asic.gov.au/for-consumers/unclaimed-money/.
Interim Payment
Trilogy Funds Management Limited (Trilogy Funds) is pleased to confirm that the interim payment was successfully processed to domestic members of the LM Wholesale First Mortgage Income Fund (Scheme) on 18 December 2024.
We expect to process the interim payment for overseas members of the Scheme before 31 December 2024.
Application for Judicial Direction
As previously reported, Trilogy Funds filed an application in the Federal Court of Australia earlier this month seeking directions in relation to the unpaid advised commissions retained by the Scheme.
The final hearing was held on 20 December 2024 and Trilogy Funds is pleased to confirm that the Court granted the Orders sought by Trilogy Funds.
The final Order of the Court is available via this link.
Next Steps
Following the final hearing, Trilogy Funds is in a position to complete the final steps required to wind up the Scheme. These steps include:
- preparing final accounts and having them audited;
- paying all current and future liabilities of the Scheme;
- lodging required statutory notices; and
- making a final payment to members.
Subject to any unforeseen matters arising, Trilogy Funds is pleased to confirm that the wind up of the Scheme remains on track to be completed within the first quarter of 2025.
Final Payment
Trilogy Funds is now in the process of calculating the final payment and expects to be in a position to provide a further update in this respect shortly.
In the meantime, please ensure your bank details are up to date by contacting Trilogy Investor Relations on 1800 230 099 or at [email protected].
Winding up notice for the LM Wholesale First Mortgage Income Fund
In relation to the winding up notice for the LM Wholesale First Mortgage Fund (Scheme), Trilogy Funds Management Limited (Trilogy Funds) is pleased to advise that it did not receive notice of any claims within the notice period.
Trilogy Funds is now progressing with the next steps required to wind up the Scheme.
Application for Judicial Direction
Following the lapsing of the aforementioned notice, Trilogy Funds today filed an application in the Federal Court of Australia seeking directions in relation to the unpaid adviser commissions retained by the Scheme.
Trilogy Funds will keep members informed of all material updates relating to the application.
Interim Payment
Trilogy Funds is pleased to advise that it will be processing an interim payment to members in the week commencing 16 December 2024.
Each member will receive a pro rata payment amounting to approximately $0.1158 per unit held. This payment represents a significant portion of the residual funds, with a small portion retained in the Scheme to account for the current and future liabilities of the Scheme as well as the unpaid adviser commissions (which remain subject to the aforementioned application).
A final payment of the residual funds will be made to members prior to the final wind up of the Scheme, which, subject to any unforeseen matters arising, remains on track to be completed within the first quarter of 2025.
To ensure you are able to receive the upcoming payments, please ensure your bank details are up to date by contacting Investor Relations on 1800 230 099 or email [email protected].
Unclaimed Money
Any unclaimed money remaining after the final payment will be transferred to ASIC for administration in accordance with s601NG of the Corporations Act 2001 (Cth). Once this occurs, you will need to submit a claim directly to ASIC. Trilogy Funds will not be liable to any person who did not receive a payment as a result of his/her failure to provide Trilogy Funds with correct payment details.
For further information on how to make a claim to ASIC for unclaimed money, please refer to ASIC’s website at https://asic.gov.au/for-consumers/unclaimed-money/.
To view the annual report for the LM Wholesale First Mortgage Income Fund as at 30 June 2024 click here.
Winding up notice for the LM Wholesale First Mortgage Income Fund
Trilogy Funds Management Limited ACN 080 383 679 (Trilogy Funds) in its capacity as responsible entity of the managed investment scheme known as LM Wholesale First Mortgage Income Fund ARSN 099 857 511 (Scheme) hereby gives notice of its intention to wind up the Scheme.
Any person having any claim, whether as creditor or beneficiary or otherwise, is required to send particulars of the person’s claim to Trilogy Funds using the contact details below not later than 23 November 2024 being a date at least six weeks after the date of publication of this notice.
After 23 November 2024, and prior to the winding up of the Scheme, Trilogy Funds will distribute the Scheme property having regard only to claims, whether formal or not, of which Trilogy Funds has notice at the time of the distribution, and Trilogy Funds will not be liable to any person of whose claim Trilogy Funds had no notice at the time of the distribution.
Contact details for claims: [email protected]
Wind Up – s601NC Notice
Trilogy Funds Management Ltd ACN 080 383 679 (Trilogy Funds) in its capacity as responsible entity of the managed investment scheme known as LM Wholesale First Mortgage Income Fund ARSN 099 857 511 (Scheme) is pleased to announce that it has resolved to commence the formal wind up of the Scheme.
Pursuant to s601NC of the Corporations Act 2001 (Cth), Trilogy Funds is proposing to wind up of the Scheme on the basis that it considers that the Scheme’s purpose has been accomplished.
As members are aware, the Scheme was established to hold units in the LM First Mortgage Income Fund ARSN 089 343 288 (FMIF) as its major asset. On 1 August 2024, the Scheme received the final distribution from FMIF. Upon receipt of the final distribution, Trilogy Funds now considers that the purpose of the Scheme has been accomplished and that the Scheme may now be wound up.
As a member of the Scheme, you have the right to take action under Division 1 of Part 2G.4 of the Corporations Act 2001 (Cth) and call a members’ meeting to consider the proposed winding up of the Scheme and to vote on any extraordinary resolution members propose about the winding up of the Scheme.
Please note that Trilogy Funds is permitted to wind up the Scheme unless a meeting is called to consider the proposed winding up of the Fund within 28 days of date of this notice.
Next Steps
Trilogy Funds has commenced taking the steps required to wind up the Scheme and has engaged external legal counsel to assist. These steps may include:
- notices being published to ascertain if any other parties intend to claim against the Scheme;
- seeking judicial direction on certain matters;
- preparing final accounts and having them audited;
- paying all current and future liabilities of the Scheme;
- lodging required statutory notices; and
- making a final payment to members.
Final payment
Trilogy Funds is pleased to advise that the Scheme is in a position to make a final payment to members prior to the final wind up of the Scheme. Subject to any unforeseen matters arising (including a members meeting being called in accordance with the above notice), Trilogy Funds is currently aiming to complete the wind up of the Scheme within the next 6 months.
To ensure you are able to receive the final payment, please ensure your bank details are up to date by contacting Investor Relations on 1800 230 099 or email [email protected].
Trilogy Funds will provide a further update with respect to the final payment in due course.
To view the annual report for the LM Wholesale First Mortgage Income Fund as at 30 June 2023 click here.
Further to our previous update, the Receiver provided the 43rd update to investors on 29 September 2023. This report, and previous receiver’s reports, can be viewed at https://www.lmfmif.com/?page_id=112 .
We will continue to update you should there be any material progress on the outstanding litigation matters.
Further to our previous update, Trilogy is pleased to update investors that the LM Wholesale First Mortgage Income Fund (Fund or LMWFMIF) is in a position to distribute funds to unitholders from the settlement proceeds in the case commenced by LMIM against Trilogy in its capacity as responsible entity of the Fund.
A conservative determination has been made to estimate the future operating costs and legal expenses required to be paid by the Fund in the short to medium term, for which these monies will be retained within the Fund.
While Trilogy has not resolved all outstanding litigation matters at this time, the current outstanding matters have been considered, in conjunction with our solicitors, the responsible entity has resolved to process a return of capital to unitholders.
The return of capital will be $0.0224 per unit with the payment to be made the week beginning 12 October.
We will continue to update you should there be any material progress on the outstanding litigation matters.
Further to our previous update, we have settled the proceedings commenced by LMIM against Trilogy in its capacity as re of the LM WFMIF (Trilogy). The settlement funds have been received by Trilogy, however prior to distribution, the solicitors acting on behalf of the fund are finalising outstanding claims that may be made against the fund.
Further, proceedings were commenced against Trilogy by Ernst and Young, the Court dismissed the claim brought against Trilogy in late 2019 and ordered Ernst and Young to pay Trilogy’s costs in defending the claim. The solicitors acting on behalf of Trilogy are seeking to recover Trilogy’s costs to be distributed to unitholders with the settlement distribution. The solicitors are attempting to settle the cost position, however it may take up to three months before it is finalised. It is important Trilogy resolves all outstanding claims to ensure no further claims are commenced against the fund follow distribution.
Under usual circumstances an application is required through the Supreme Court of Queensland to allow Trilogy to distribute the funds to unitholders, however if the position with all outstanding claims are able to be resolved, it may alleviate the need for Trilogy to make an application to the Court, further delaying the distribution.
In our previous update, dated 13 March 2020, we outlined that the Fund’s lawyers were putting EY on notice about the expected distribution.
EY’s lawyers are declining to confirm whether they intend to make further claims against the Fund.
Consequently, our lawyers have sought barrister’s advice as to whether we have taken sufficient steps to make a distribution or whether a directions application is required. They are also considering whether any claim they may make would be statute-barred due to limitation periods having passed.
We will update you as soon as we have received that advice.
We refer to previous updates and confirm that we have sought legal advice from the Fund’s lawyers (Squire Patton Boggs or SPB) prior to making a distribution. We have summarised the risks contained in that advice to the Fund as follows:
- The July 2019 judgment from Jackson J in relation to the EY proceedings does not prevent EY from commencing new proceedings against the Fund in relation to the same allegations as raised in the original statement of claim. While no appeal has been filed, it is within EY’s right to commence proceedings or to join the Fund to existing proceedings for the matters arising out of the EY proceedings, despite the statement of claim previously being struck out.
- In relation to outstanding claims against the Fund for adviser commissions, SPB propose that they write to each party in order to give them an opportunity to notify any objection.
- Prior to any distribution, it would be prudent that sufficient funds be withheld to cover the potential liability to pay for adviser commissions, unpaid distributions, ongoing fund audit, tax and custodian expenses, insurance, management and registry fees, future legal fees and disbursements necessary in preparing any application to seek a direction from court.
Consequently SPB wrote and sought that the outstanding claim against EY be resolved and a release be obtained. Unfortunately this did not eventuate and SPB have now written to EY notifying them of our intention to make a distribution, providing them with the opportunity to make any objection. In the event that there is an objection, SPB advise that Trilogy should make provision for any potential liability to EY, including legal and other costs that Trilogy may incur in defending such a claim.
SPB have also advised that it is prudent to have the adviser commission issue resolved prior to any distribution- we have suggested that the amount be retained until this is resolved through court.
On balance, given that there is uncertainty concerning the EY position, we have retained funds that we estimate as being reasonable to cover off potential legal costs should they arise. Provided EY make no objection over the course of the next week, our intention is to make an interim distribution in the amount of $2m ( approx. 2.3c per unit ) to unitholders in the Fund. Of course, once the EY matter is formally resolved, we intend to make a further distribution representing the majority of the amount withheld.
We expect Mr Whyte will make a further distribution to the feeder funds in due course. Assuming that to be the case, SPB advise that we then make an application under the Trusts Act Qld to obtain a direction to finalise distribution to the unitholders. The purpose of that application would give certainty about any potential liabilities, including the adviser commissions, if they remain unresolved by that time. Once that has been done, we can then make a further distribution to unitholders.
We are pleased to advise that judgement in the legal cases affecting the LM Wholesale First Mortgage Income Fund were handed down at the end of last week by Justice Jackson.
The preliminary conclusion of our legal advisers is that the judgments are favourable for LM Wholesale First Mortgage Income Fund unitholders, in that David Whyte, receiver for the LM First Mortgage Income Fund, is now authorised to make a distribution to unitholders in that fund which includes the LM Wholesale First Mortgage Income Fund.
However, it is important to note that an appeal period does apply and that the parties adversely affected by the judgment may still appeal the judgment.
In the meantime, we will update unitholders with information as it comes to hand, including updates from Mr Whyte and any material information from other parties.
Update – LM Court Proceedings
The Court has directed that Trilogy, as the Responsible Entity of the WFMIF, and Trust Company as the Custodian of the property of the WFMIF, are justified:
- in settling Supreme Court of Queensland Proceedings 13534 of 2016 (the Feeder Fund Proceedings) on the terms set out in a Deed of Settlement and Release as varied by a Deed of Variation (Deed of Settlement); and
- into entering and performing the Deed of Settlement.
We will update you once we receive any further information on possible distributions from the LM First Mortgage Income Fund.
- Notice to WFMIF members dated 2 May 2019
- Affidavit of Philip Ryan sworn 30 April 2019
- Affidavit of Susan Goodman sworn 30 April 2019
TAKE NOTICE that Trilogy, as the Responsible Entity of the WFMIF, and Trust Company as the Custodian of the property of the WFMIF, have applied to the Supreme Court of Queensland for directions as to whether they are justified:-
- in settling Supreme Court of Queensland Proceedings 13534 of 2016 (the Feeder Fund Proceedings) on the terms set out in a Deed of Settlement and Release as varied by a Deed of Variation (Deed of Settlement);
- in causing Trilogy as responsible entity of the WFMIF and Trust Company as Custodian of the property of the WFMIF to enter into and perform the Deed of Settlement.
This application is set down to be heard by the Supreme Court of Queensland at Brisbane on 2 May 2019 at 9.30am.
The Notice to Members of the WFMIF in relation to the application, together with a copy of the application and supporting documents, can be found below.
To access BDO reports to Investors, please head to the LM First Mortgage Income Fund website.
29 August 2018
The most recent updates to the fund, including the set date for mediation, can be found below.
10 July 2018
Claim by LM First Mortgage Income Fund against LM Wholesale First Mortgage Income Fund.
The most recent updates to the fund can be found below, including current status of claims and next steps.
18 May 2015
LM First Mortgage Income Fund Receivers application to Supreme Court:
Annexure A is available for download below regarding a question that has arisen between the liquidators and Mr Whyte as to the extent of Mr Whyte’s powers.
