Dealing with the liquidators

Shield and First Guardian are in liquidation – what does that mean? Is there anything you need to do? Keep reading to find out more.

What’s happening?

Both Shield and First Guardian funds were closed to new investors and frozen because of concerns about the investments and how the money was being used. Liquidators were appointed to look at the books, find and sell all the assets and pay debts.

What is a liquidator?

A liquidator is a person who is appointed to manage the process of closing or winding up a company or investment fund (also known as liquidation). The liquidator can be appointed by the court or by the directors of the company or fund. In Australia, it is common for more than one person to be appointed as a liquidator. Liquidators are regulated by ASIC. They have to be independent, follow the laws and treat everyone fairly.

When a liquidator is appointed to wind up an investment fund, the liquidator takes control of the fund from its responsible entity and makes independent decisions to ensure a fair and orderly liquidation process. The liquidator’s primary duties include:

• selling the fund’s assets, 
• paying debts owed to creditors,
• investigating the fund’s affairs and providing a report to ASIC,
• making a public report on the assets and debts of the fund.

Once the liquidator has sold all the assets, the liquidator will pay the fund’s debts to its creditors. There are rules about who gets paid, what order they get paid in and how much they get paid if there is not enough money. Generally, investors get paid after all the creditors have been paid. In most liquidations, there is not enough money for investors to get all of their money back.

Am I a creditor or an investor?

Investors are generally not considered to be creditors. You are an investor if you invested money in Shield or First Guardian in exchange for a share or unit of the fund. Investors in investment funds are often called unitholders. 

You are a creditor if the fund owes you money because you:

• supplied goods or services to the fund,
• made loans to the fund, or
• were an employee and were not paid all your wages or other entitlements.

If you believe you are a creditor, you may wish to get legal advice about what steps you should take to be part of the liquidation process.

Will I get my money back?

There will not be enough money available in the Shield and First Guardian funds to pay you back everything you invested after the liquidations are complete. However, it is likely that you will get some money back. There is also other work being done to try to get compensation for people.

Find out more about what’s happening to get money back for people who invested in Shield and First Guardian.

What do I need to do?

If you invested in Shield or First Guardian through a super platform, there is nothing you need to do in the liquidation process. The trustee of the super platform will make a claim to the liquidator for you. 

If you have a self-managed super fund, you may need to contact the liquidator:

• For Shield Master Fund, you can find information about the liquidation on the liquidators’ website. The liquidators do not require you to make a claim. They will provide you with updates when information is available. If you have not received any updates, you can contact the liquidators at shieldinvestors@alvarezandmarsal.com to confirm they have your correct contact and investment details.
• For First Guardian Master Fund, you can find information about the liquidation as well as a claim form (.pdf file, 332 kb) on the liquidator’s website. The liquidators have asked investors (called unitholders) to lodge a completed claim form to assist them to confirm the information they have been provided by First Guardian. The form also allows you to change your contact details or ask the liquidators to contact another person on your behalf. If you have not received any updates, you can contact the liquidators at falcon.investors@fticonsulting.com  to confirm they have your correct contact and investment details.