Eric Pinon in charge of certifying documents in the H2O AM/Windhorst case
The Paris Commercial Court has ruled in favour of many complainants who want to obtain documents from the management company in order to calculate their pecuniary damages, NewsManagers learned. Eric Pinon’s mission is to verify the adequacy, completeness and sincerity of the documents transmitted by H2O AM.
The trial is closing for H2O AM in the Windhorst case. The Paris Commercial Court has ruled in favour of many plaintiffs seeking to obtain documents from the management company, a former affiliate of Natixis IM, in order to calculate their pecuniary damages, NewsManagers learned. An order issued on 8 June, which has not yet been made public, forces H2O AM to send several dozen documents concerning its investments in the Tennor Group’s bonds (owned by Lars Windhorst), and some of its management choices, according to several sources close to the file.
The certification of these documents has been entrusted to a central figure in asset management in France: Eric Pinon. The outgoing President of the French Association of Management (AFG) was thus appointed as a “recording technician”, whose mission is to verify the adequacy, completeness and sincerity of the documents transmitted by H2O AM in light of the order issued by the judge. This is not a judicial expert role, since he will not be issuing an opinion. His report will be due within four months.
Interviewed by the editorial board, the two lawyers representing the different applicants confirmed this information. It is very rare to obtain both the requested expert and all the requested pieces with such a fine granularity level. This suggests that the court has become aware of the seriousness of this case and of the urgency for investors», comments Guillaume-Denis Faure, of the law firm Simmons & Simmons, lawyer of the German management company Sauren, who joined the applicants during the proceedings. For its part, H2O AM did not wish to communicate on this subject.
This decision of the court follows a subpoena of H2O AM in summary trial at the end of September 2021 by the Collectif Porteurs H2O, which brings together investors with assets in the side pockets, Cantonment funds consisting of illiquid bonds of the Tennor group. The collective, represented by Maître Dominique Stucki, wanted to clarify the responsibilities incurred in managing various consumer UCITS (H2O Allegro, H2O MultiStrategies and H2O MultiBonds, H2O Adagio, H2O Moderato, H2O MultiEquities, H2O Vivace) having incurred significant losses in investments in notoriously illiquid assets between 2015 and 2019.”
No official timetable for funds redemption from H2O AM
The last aggregate net asset value of the ten side pockets, as at the end of May, comes to €1.06 billion in outstanding amounts, i.e., a loss of more than 35% compared to the initial valuation of approximately €1.6 billion. And unitholders may soon find out where they stand. Tennor has to redeem its maturing bonds this month. Tennor, which was initially declared insolvent by a Dutch court in November 2021 before having the decision overturned on appeal, has already been granted a six-month grace period by H2O AM, according to a January letter to unitholders reported by the Financial Times.
In response to an enquiry from Newsmanagers, the asset management company declined to provide a redemption timetable. “H2O AM is still working with its legal and financial advisors on the exposure of the SP funds [editor’s note: “side pockets”] to the Tennor Group’s securities with a view to disposing of them on the best possible terms. We will provide further information as soon as it becomes available”, said an H2O AM representative.
However, the complainants’ grievances are not limited to their frozen investments. “We are seeking a full refund of the amounts lost in respect of the investments in the Tennor group’s bonds, but also of the fees paid with H2O AM funds to try to fast-track the restructuring of these debts, for example, the brokers’ fees paid in 2019 in connection with the buy-and-sellbacks, as well as the loss of opportunity and moral injury, and the specific economic losses sustained by professional investors and intermediaries (CGP, etc. ) as a result of the deception perpetrated by H2O with the support of its ‘trusted third parties’”, said Mr Stucki, who is also representing funds managers, asset management advisors and institutional investors outside of the class in this case. Proving the existence of deception with respect to the information provided to customers at the time of the events will be a key issue for the business plaintiffs, who will be looking to restore their credibility with their end customers. For example, German fund manager Sauren, whose three house funds are involved, stated through its lawyer that it had “made a documented decision to exit H2O AM funds a year before the case arose, but [had subsequently] received misleading information [that] persuaded it to remain invested”. The preservation of public confidence in the financial industry will, to some extent, be at stake here.