Arena Capital Limited (Arena) was a Ponzi scheme.  Arena's liquidators applied under s284(1)(a) of the Companies Act 1993 for directions regarding the distribution of assets under liquidation.

The Court held that dividing the assets into trust assets and general assets was inefficient in the circumstances and ordered a "common pool approach."  The Court ordered distribution on a pro rata, pari passu basis.  The investors had borne the same degree of risk and it was not cost-effective to trace the numerous small contributions.

The liquidators proposed a "net contribution" basis for calculating distributions - the amount paid by an investor less the amount they received from Arena, calculated at the date of liquidation.  One investor demonstrated that this approach favoured investors who received pre-liquidation payments from Arena, and proposed that those sums be voided within the distribution calculations.

The Court rejected this, noting that the 124 investors who had recovered their deposits could not lawfully be required to account for those sums.  The alternative approach required different treatment of pre-liquidation returns across categories of investors.  Furthermore, the alternative approach would circumvent the voidable transactions regime in the Companies Act 1993, and the fraudulent dispositions regime in the Property Law Act 2007.

See the Court's full decision here.