Business rescue and debt recovery specialist Insolvency & Law (I&L) has highlighted 'troubling security trustee issues' in its latest briefing note on The 79th Group which suspended redemption and interest payments on its loan notes.
It said scrutiny was intensifying over the robustness of the legal protections supposedly in place noting that many loan note holders are now turning their attention to the Security Trustee arrangement "their supposed safety net – only to find serious cause for concern".
"Insolvency & Law (I&L) has conducted a detailed review of the relevant documents and Companies House filings. What we’ve uncovered raises significant doubts about the effectiveness of the security arrangements surrounding these investments.
The article highlighted what it said were two central issues, namely "the questionable strength of the T&T Trustees Debenture Deed and the confusing and unresolved presence of Castle Trust & Management Services Ltd (CTMS} (now in liquidation) as trustee on certain charges".
The Seventy Ninth Group has denied any wrongdoing amid a City of London police probe, covered by Investment International here.
