Suspended traded life settlements fund EEA Life Settlements has told shareholders to approve a restructure of the troubled vehicle or else face its liquidation.
In a circular to shareholders sent out last night, EEA - which has been suspended since November 2011 - told shareholders that it needs their approval for its restructuring proposals to take to the Guernsey Financial Services Commission.
EEA said if it did not get the approvals, it would consider appointing a liquidator.
It said: "In the event such approval [from shareholders] is not obtained the company will not be able to proceed with the restructuring proposal and the directors will have to reconsider the future of the company, and the likely conclusion is that the directors will take the steps necessary to seek to appoint a liquidator."
The fund was worth $1bn at the time of its suspension.
However shareholders are at risk of losing a large chunk of their investments, with the NAV on the fund and its cells cut by 10% in August.
Chairman of the fund Mark Colton said at the time the maturity dates of the second-hand life policies held within the fund would be extended - meaning it will take longer for money to flow into the fund.
As a result, he said there will be a "reduction to the net asset value of the fund of around 10% relative to the value immediately prior to the suspension of dealings".
In last night's circular, EEA set out two options for a restructuring of the suspended fund and its cells, proposing that shareholders either accept revised terms on their existing investments, or else opt to run-off the shares, although no details are given about what monetary terms they can expect under such an option.
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