1. Echelon Wealth Management Limited (in Liquidation) - Circular to Creditors
2. Report to Creditors
3. Circular to Creditors

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Clients and creditors of this Company are advised that Blair Nimmo of KPMG LLP was appointed as Provisional Liquidator on 17 October 2008. This appointment was recalled, and subsequently Stephen Cork and Anthony Spicer of Smith & Williamson were appointed as Joint Interim Liquidators of the Company by the Court of Session in Scotland on 11 November 2008. The Interim Liquidators convened an initial meeting of all known creditors on 16 December 2008 at which the appointment of Messrs Cork and Spicer as Joint Liquidators was confirmed.

At the abovementioned meeting, a Liquidation Committee was established pursuant to Section 142(1) of the Insolvency Act 1986. The Committee is made up of five creditors who will work with the Liquidators over the course of the Liquidation to discuss key strategies and decisions.

The Financial Services Authority (“FSA”) have been informed of the appointments and they have confirmed that the FSA Register has been amended to reflect the fact that the Company is no longer conducting investment business.

The liquidators are conducting investigations into the Company’s affairs and will report to creditors on their progress in due course. The likelihood of a dividend to creditors is unknown at this stage pending completion of these investigations.

Creditors may be aware of the Financial Services Compensation Scheme (“FSCS”), which is the UK’s statutory fund of last resort for customers of financial services firms. The FSCS is an independent body set up under the Financial Services and Markets Act 2000 and protects deposits, insurance, investments and mortgage business. Its service is free to consumers. The FSCS may pay compensation if a financial services firm is unable, or likely to be unable, to pay claims against it which are eligible for compensation. Once these conditions are satisfied the firm must first be declared “in default” before the FSCS can start paying compensation to eligible claimants. Claims are assessed by the FSCS in accordance with rules made by the FSA. For eligible claims relating to investment business the FSCS can pay up to £48,000 compensation to an individual. This is calculated as 100% of the first £30,000 and 90% of the next £20,000. The Company was declared in default by the FSCS on 4 June 2009. Since that date the Liquidators have been working with the FSCS to adjudicate on creditor claims received. Claims received by the Liquidators are being notified to the FSCS as they are received, who will then send the creditor an FSCS claim form. Further information in relation to the FSCS is available on its website at www.fscs.org.uk.

The Company maintained a PII insurance policy for Financial Loss, Civil Liability and Official Investigation Costs. The directors also had a Directors and Officers Liability Insurance (D&O) policy. The liquidators have liaised with the Company’s pre-appointment brokers and obtained legal advice on the policy to seek to ensure that steps are not taken which might later limit or forfeit a party's ability to bring a claim under any relevant insurance policy. Accordingly, we have continued to notify claims to the Company's broker and insurer as and when these have been communicated to us, in accordance with the terms of the policies. Furthermore, with regard to the PII policy, the liquidators are submitting all proofs of claim received from creditors to the insurers as claims under the PII policy.

In accordance with Rule 4.15 of The Insolvency (Scotland) Rules 1986, we are asking all creditors to submit statements of claim to the liquidators. Creditors are asked to include account numbers on their claim forms and supporting documentation (including account set-up contracts) to assist in identification of their accounts from the Company’s records and ultimately, the adjudication of their claim. Accordingly, creditors who have not already done so are required to complete a Statement of Claim form and send to the below address without delay.

Attention: Gavin Hart
Smith & Williamson
25 Moorgate
London
EC2R 6AY

Attached to this page are copies of the correspondence which has been sent to all known creditors of the Company. Statement of Claim forms are contained within this correspondence.

Any further enquiries should also be directed to Gavin Hart of Smith & Williamson on 020 7131 4000.