On 3 January 2012, the CSSF has been informed that KPMG Luxembourg S.à r.l., represented by Mr. Zia Hossen, acting as provisional administrator (administrateur provisoire) (the “Provisional Administrator”) of LIFEMARK S.A., with registered office at 2, rue Joseph Hackin, L-1746 Luxembourg (“LIFEMARK”), is not and will not be in a position to fully achieve the objectives of its mandate given by court order of 27 October 2011 (the “Mandate”), including the implementation of a comprehensive restructuring plan, and that an orderly run-off of LIFEMARK’s portfolio under the supervision of a court appointed liquidator is currently deemed to be the only realistic alternative. Therefore, the Provisional Administrator formally requested the withdrawal of LIFEMARK’s licence as a regulated securitisation undertaking under the Luxembourg securitisation law of 22 March 2004 (the “2004 Law”) and the petitioning of its liquidation in accordance with the Luxembourg statutory framework. In this regard, the Provisional Administrator also requested that the CSSF intervene in order to extend its Mandate so that the Provisional Administrator will be able to hold the bondholders’ meeting of 13 February 2012 which has been convened so that bondholders may consider and vote on the orderly run-off proposal, and allow for any adjournment, and, as the case may be, to continue to manage LIFEMARK until a liquidator is appointed once the licence is withdrawn.
In this context, the 1st vice-president of the Luxembourg district court, sitting in commercial matters, reappointed on 23 January 2012, at the CSSF’s request and in accordance with article 25(2) of the 2004 Law, KPMG Luxembourg S.à r.l., represented by Mr. Zia Hossen, as provisional administrator of LIFEMARK, for a new period of four (4) months from the delivery of this order, with a largely unchanged mandate and largely unchanged most extensive management powers (please refer to our press release of 15 February 2010), but with a further mission to continue to manage LIFEMARK, as the case may be, under the supervision of the CSSF in its capacity as supervisory commissioner and to undertake all necessary steps to prepare a judicial liquidation in the case of a possible withdrawal of the licence. The decision explicitly confirms that this new mandate replaces and brings about the expiry of the previous mandate given by court order of 27 October 2011 (please refer to our press release of 2 November 2011). The court has also confirmed that the measure of 23 January 2012 in itself is not to be considered as an insolvency procedure such as bankruptcy, controlled management, a procedure of suspension of payments or judicial liquidation.
In light of the factual circumstances described above, the CSSF has thus put LIFEMARK on notice on 1 February 2012 of its intention to withdraw LIFEMARK’s licence as a regulated securitisation undertaking under the 2004 Law, on the basis of inter alia the following reasons:
- LIFEMARK has experienced, and continues to experience, an ongoing shortage of liquidity and was unable to remedy its liquidity problems during the provisional administration;
- the heavily distressed financial situation of LIFEMARK which has continuously deteriorated due to the significantly lower returns realised on the portfolio than foreseen;
- the impossibility for the Provisional Administrator, after more than 2 years, to fully achieve the objectives of the provisional administration, in particular the implementation of a comprehensive and sustainable restructuring plan;
- due to the liquidity shortage LIFEMARK investors’ rights have been negatively impacted; and
- breaches of the 2004 Law and of Luxembourg company and accounting laws.
The CSSF finally informs that interested parties have the opportunity to submit written observations until 9 February 2012 close of business by mail or e-mail (exclusively to the following email address: [email protected]).