Woodford Investors Get Closer to Lawsuit Over Fund’s Collapse

(Bloomberg) -- Investors in Neil Woodford’s former flagship fund got a step closer to filing a lawsuit, sending a formal notice to the fund’s administrator.

Lawyers for the investors accuse Link Fund Solutions of “alleged indefensible negligence in handling of up to 300,000 people’s investments,” law firm Harcus Parker said in a statement. The firm said it sent a so-called pre-action letter to Link, which is a requirement before a lawsuit can be filed in the U.K.

Multiple law firms have been gathering complaints from investors who were locked in Woodford’s former flagship 3 billion-pound ($4 billion) fund after it froze redemptions in June 2019. Woodford was ousted and a decision was made to liquidate the fund less than six months later.

The letter claims Link sanctioned excessive investments “in inappropriate illiquid and/or impermissible assets” and “exposed the fund to concentrated risk.”

Harcus Parker is the first law firm to send the pre-action letter, which starts the litigation process. More than 8,000 former investors expressed interest in joining a lawsuit, and hundreds of investors have already signed up, according to the statement.

“LFS has received a letter from Harcus Parker on behalf of a single investor, to which it has responded in full,” a spokesperson for Link said in an emailed statement on Friday. “No legal proceedings have been served on LFS.”

Woodford’s investing empire collapsed last year when he couldn’t sell his holdings quickly enough to meet redemption requests from his main fund. It was a stunning fall from grace and was one of the most dramatic in London’s financial history.

A spokesperson for Woodford wasn’t available to comment.

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