Football Index
On 10 May 2021 Henderson & Jones was appointed by the Court as a representative of certain Football Index customers to make legal submissions on behalf of those customers at a hearing to determine how certain funds deposited in a trust account for the protection of customers should be distributed.
BetIndex Limited t/a Football Index went into administration on 26 March 2021. The Joint Administrators of the company identified certain issues regarding a trust account of which the company is a trustee.
The trust account was set up to protect the funds of customers; however a number of questions arose as to the interpretation and operation of the deed which created the trust. In particular, the deed did not clearly state the date on which customer’s entitlement to customer funds should be calculated or paid. This was of material relevance because many costumes had live bets which had continued (and were continuing) to accrue dividends since the date of insolvency.
Those customers had a significant interest in the calculation date being later. Conversely, those customers who did not have live bets but had money deposited in their “e-wallets” (i.e. ready to invest but not actually invested) had an interest in the calculation date being earlier as they would receive the entirety of these sums.
The Joint Administrators therefore asked the Court to determine this question. They informed the Court that they believed the correct interpretation of the trust deed was that the calculation date should be the date of insolvency. However, recognising that this position was detrimental to the interests of a significant proportion of the company’s customers - the Joint Administrators asked the Court to appoint a representative for those customers and to argue for a later calculation date so that the Court would have the benefit of submissions from all perspectives.
H&J was appointed by the Court on 10 May 2021 as a representative for those customers with an interest in arguing that the calculation date was a date after 26 March 2021. The application was listed for 21 May 2021 and H&J worked intensively with its appointed counsel from the date of its appointment to the date of the hearing.
The Court handed down its judgment on 8 June 2021 and ultimately decided that the calculation date should be the date of insolvency - as contended for by the joint administrators. H&J had argued that the whole of the trust monies should be distributed to customers and that monies should not be returned to the Company as it would then fall to be distributed to all of the Company’s creditors - thereby diluting the customers’ share of the dividends. Deputy Judge Vos expressed his sympathy for this position but found it is inconsistent with what he found to be the correct interpretation of the trust deed. The judge also noted that the dilution effect would be minimal given that “the overwhelming majority of creditors (both in number and in terms of the overall amount owed to creditors) are in fact the customers”.
