Liquidation into its fifth year

 by DOUGLAS SHEPHERD

Readers who have been with us for some time may recall the Scottish Borders Council waste disposal fiasco involving their penniless 'specialist contractors' New Earth Solutions Group and a linked offshore investment fund by the name of New Earth Recycling and Renewables plc (NERR), the supposed funders of a £21 million state of the art processing plant at Easter Langlee, Galashiels.

The £80 million deal, signed in 2011, collapsed in disarray in February 2015 after it became clear that both NESG and the Isle of Man-based NERR fund was insolvent and heading for liquidation. The treatment plant was never built and Borders council taxpayers were left with a whopping £2.4 million bill for the council's involvement in the misadventure.

NERR finally succumbed to financial meltdown in July 2016 when joint liquidators from accountants Deloitte were appointed to oversee an organisation with debts/liabilities of at least £113 million.

The liquidators were quick to warn that 3,252 investors in NERR were likely to get nothing back once the mess was sorted out and liquidators Alex Adam and David Craine were paid for their work. Then information obtained via Freedom of Information showed it had been stated as early as 2013 that the funding from NERR for Easter Langlee was no longer available meaning the ill-fated Borders venture had no funder of last resort from that time.

A new update to creditors by the joint liquidators, posted on the Deloitte website, indicates the investigation into NERR, funded by the Manx financial industries regulator, is still a long way from reaching a conclusion more than four and a half years down the line.

The report explains: "The role of the Joint Liquidators is, in the circumstances of this case, to investigate the reasons for the failure of NERR, determine whether liability for the failure can be attributed to one or more parties, and thereafter to consider whether there are viable claims, which can be brought against those parties."

It has already been revealed the liquidators have been sifting through some 200,000 documents linked to NERR's business activities. The fund was part of the Premier Group (Isle of Man) Ltd which also went belly up several years ago.

Under the heading Investigations the new report states: "The Joint Liquidators, in concert with our legal advisors, have continued to progress our investigations into the roles of other advisers to the Company. In respect of those investigations, since our last update we have obtained, and are reviewing, further documentation. 

"We are also in the process of updating our findings for this new information for review by our legal advisers and, ultimately, obtaining formal counsel’s opinion as to whether there is a commercially viable claim which has a realistic chance of success, and which – if successful has the prospect of resulting in a return to investors. We are unable to provide further details at the present time due to the risk of prejudicing any possible future action, however we will provide further information as and when we are able to."

The NERR fund was promoted by so-called Independent Financial Advisers in countries around the world. Stories have emerged of investors losing their life savings, pension funds and their homes following the disastrous collapse.

A significant number of cases against advisers have been taken to the Financial Ombudsman service while others are included in claims being lodged in Court by law firms.