Oops! We could not locate your form.

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.

2022-23 Annual Report

To view the annual report for the LM Wholesale First Mortgage Income Fund as at 30 June 2023 click here.

Update to members dated 16 October 2023

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.

Update to members dated 8 October 2020

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.

Update to members dated 19 May 2020

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.

Update to members dated 30 March 2020

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.

Update to members dated 13 March 2020

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:

  1. 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.
  2. 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.
  3. 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.

Update to members dated 11 October 2019

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 to members dated 30 September 2019

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:

  1. 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
  2. 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.

LM Court Proceedings

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:-

  1. 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);
  2. 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.

Notice to WFMIF members dated 22 March 2019

Interlocutory Application dated 1 February 2019

Affidavit of Philip Ryan sworn 1 February 2019

BDO reports to investors

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.

Jump To Top