The High Court has lifted the administration orders placed on two Cyton Real Estate funds, Cytonn High Yield Solutions LLP (CHYS) and Cytonn Real Estate Project Notes LLP (CPN), and appointing an Official Receiver to take control of the process.
However, the court has maintained the moratorium over the two funds.
CHYS and CPN became illiquid in 2021 due to COVId-19 related constraints, compelling the board of directors of the funds to file for value protection under a court-appointed administrator.
In a court ruling made on January ,6 2023, Justice Alfred Mabeya merited applications by creditors seeking the lifting of administration orders scheduled to run from October 2021 to October 2022.
The judge lifted the administration on the grounds that the administrator, Kereto Mirima, failed to demonstrate competence in his undertakings since his appointment.
The court further ruled that the administrator surrenders all the official documents he holds and the recovered assets to the official receiver, with whom all the claims from creditors should be lodged.
Efforts to remove the administrator kicked off with a vote in April 2022 by a section of investors, who accused him of failing discharge his duties as required by law, culminating in a court case filed in May 2022.
Upon the expiry of the administration period on October 6 2022, Kereto sought extension of the orders arguing that the assigned time was insufficient to help yield the required solution, which was to restructure the fund and help refund the creditors their dues.
Reached for comments, Edwin H. Dande, CEO of Cytonn Investments, said that “this is a great outcome because it allows creditors, the official receiver and the real estate portfolio to engage expeditiously to resolve the portfolio for the benefit of all concerned”.
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