Pollen Street threatens legal action against own manager

UPDATE 10:00 am - Pollen Street Capital is now calling on its shareholders to appoint new board members.

In a statement released this morning Lindsey McMurray, managing partner of Pollen Street Capital, said: "The restrictions imposed by the board are severely restraining our ability to manage PSSL for the benefit of shareholders."

"It is now time for shareholders to appoint their own representatives to the board to avoid causing significant and permanent damage to PSSL.”

In a letter to its shareholders, Pollen Street Secured Lending (PSSL) has threatened legal action against its own manager.

The new threat of legal action joins the long list of troubling developments in the feud between Pollen Street Capital and PSSL.

Tensions within the listed-direct lending fund world have risen of late following accusations of poor governance by Pollen Street Capital, the manager of the HoneyComb and PSSL trusts, by the board of the latter fund.

The fund has accused the manager of dragging its feet during takeover talks by failing to provide the documentation needed. 

In a letter to its shareholders, PSSL’s board said: “It goes without saying that the Board wishes very much that it had not found itself driven to spending time airing these differences with the Manager, and hopes that the Manager will start cooperating with the Board.”

“If the Manager continues to fail to produce the documentation and other information requested, then the Board anticipates that it will need to commence legal proceedings to enforce its rights, including potentially issuing a court claim to obtain due diligence materials,” the letter continued.

Earlier this week the Chairman of HoneyComb, Robert Sharpe, came out in support of Pollen Street and the fund’s “extremely positive relationship” with the asset manager. 

“Pollen Street's interaction with the Board has been transparent and collaborative and they, like us, have always been focused on managing the Company in the best interests of its shareholders,” Sharpe said.

“We are very disappointed that the recent PSSL events have been presented in a way which implies that Pollen Street is in some way lacking in any of these qualities. I find some of the accusations very hard to believe, as they do not at all reflect the Honeycomb Board's relationship with or experience in dealing with Pollen Street,” he added.

There continues to be a host of contradicting information coming from Pollen Street and time will only tell if the lender will take legal action against its manager, although this certainly looks like a strong possibility.