USGFX Bankruptcy Final Hearing Scheduled for October 28-29

BRI Ferrier, the liquidator of bankrupt Australian Retail forex broker Union Standard International Group Pty Ltd (USGFX), has updated a fact sheet and timetable, following the directions hearing held on 24 June 2021, in which the liquidator submitted an application, seeking directions on the handling and distribution of the funds of the bankrupt company.

Specifically, BRI Ferrier has sought directions on matters including:

• deal with the different pools of funds available to the Company;

• determine the entitlements of different classes of clients to those funds;

• how costs are to be applied to the funds; and

• setting an order of priority for the distribution of the available funds in due course.

At the hearing, Justice Jagot made various interim Orders, including:

• setting the timetable for application;

• approving the appointment of representative client creditors;

• approving costs to be paid from available funds; and

• setting a new approval regime for costs moving forward.

The Court also confirmed at the hearing the appointment of two “contradictors” acting as representatives for the major creditor classes, being “trading” clients and “investor” clients, and their respective legal counsels. The contradictors’ role is to provide informed argument to the Court on behalf of their respective class of creditor, whilst the Liquidators lead the majority of the factual evidence. The appointed contradictors are both members of the Committee of Inspection and are therefore well-informed on the liquidation.

Furthermore, the Court’s Interim Orders approved the use of the Trust funds to pay certain costs that have already been incurred, and those to be incurred relating to the proceedings. Also, the Court set a regime for the approval of costs moving forward, being first by the Committee of Inspection, or failing which the Court. Access to funding is essential in order to allow the Liquidators to pursue recovery actions for the benefit of creditors including but not limited to for instance, tax refunds.

So far, the Court determined that the Liquidators are justified in paying their remuneration approved by the Committee of Inspection in the amount of $1,423,849.50 plus GST from the Trust Accounts.

According to the document the liquidator published, the final hearing date has been set for 28 and 29 October 2021.

BRI also confirmed in the document that USGFX clients have lodged many millions in claims during the liquidation, and that there are insufficient funds currently available to discharge those claims in full.

BRI Ferrier said that it has recently entered into an arbitration process with one of the offshore Money Processors, and is “hopeful” of a successful recovery from this party. No specific amount was given as to how much money might be recovered.

The liquidator is exploring a possible recovery in respect of settlement monies paid out to former clients of Maxi EFX Global AU Pty Ltd (trading as EuropeFX), the company’s former Client Authorised Representative. It is currently collating information in this respect.

In addition, BRI has engaged a private investigator to assist in locating “key individuals/parties located offshore, in particular Myanmar” – meaning Soe Hein Minn, the company’s controlling shareholder who remains AWOL and in contempt of court in Australia for refusing to cooperate with the liquidators. However, the ongoing investigations have been hampered by the political unrest in Myanmar and the COVID-19 pandemic.

​Late last year, the board of USGFX has released a statement in which the bankrupt company expected to return 100% of the funds by the end of March 2021. However, it looks like now creditors and former clients of the company can't even find out how much money they will get back until this November.