David Rubin and Partners: questions to answer

Word has reached us here in the States that Henry Lan and David Rubin, the insolvency practitioners appointed over Tiuta plc, are so far not covering themselves in glory. Their report to creditors dated November 6, 2012 has raised serious questions in investors’ minds:

1. What has happened to the Tiuta subsidiaries containing properties that we suspect were bought largely with money from the Fund? The report acknowledges the existence of ‘various subsidiaries’ but it fails to detail them or to provide balance sheets or other basic information about those SPVs. At least two – Tiuta Assets Limited and Tiuta Estates Limited – hold (or held) valuable investment properties. Have the subsidiaries or their assets been sold to the directors or connected entities? If they are still held, what is the net value, and will it be realised for the benefit of creditors?;

2. What was David Rubin and Partners’ (DR&P’s) involvement with Tiuta in April 2012 or earlier? The report claims that DR&P was first consulted by the group in April 2012 but omits any detail about the nature of this engagement. Connaught’s directors have alleged that senior figures of DR&P accompanied the directors of Tiuta plc at a meeting intended to persuade Connaught not to put the group into administration in April 2012, when the quarterly distribution due at the end of March was not paid. Investors want to know whether this claim is true;

 3. Did DR&P have a hand in the dodgy deal by which Tiuta’s directors offloaded the group’s liabilities into Tiuta International Limited and removed the guarantee to the Fund? The report claims the firm was not involved between April and early August. Is this really true? And even if it is, did the administrators-in-waiting provide advice relating to that transaction before temporarily stepping away? The administrators acknowledge that the transaction is in dispute but fails to recognise the Fund as even a contingent creditor.

 The administrators’ report for Tiuta plc has been provided to investors on a confidential basis in the data room set up by Duff and Phelps so we have not provided it for download here. However if any investor or industry insider has any information about the conduct of DR&P that they believe we should be aware of, we ask them to email us at: connaughtactiongroup@gmail.com.