How an investment fund obtained an asset map worth EUR 7-9 million across five jurisdictions

The project company in which the fund had invested announced that it could not meet its obligations. By that point, its records looked almost impeccable in their way: assets written off, operations wound down, staff reduced, accounts nearly empty. Formally, there was nothing to recover from.

A fund with approximately EUR 800 million under management is a disciplined organization. The default of a single project is not a catastrophe here but a routine situation with an established procedure. Yet that same discipline gave rise to the question: a write-off of this scale should leave a trace, and there was none.

The discrepancy lay in the pace. The wind-down of operations happened faster than a genuine business closure normally occurs: contracts were closed within a compressed timeframe, and the beneficial owner, reachable for years, stopped responding at roughly the same time. Each of these facts, taken alone, is explainable. Their coincidence in time called for verification.

It matters that the task was not framed as a search for a violation. Rapid wind-down of a business is not an offense, and the unavailability of a beneficial owner may have a dozen explanations. What was required was to establish the factual picture: whether economic activity connected to the former project persists, and where and in what form.

The second part of the task was realism. The fund did not need a list of what had been found, but an understanding of which of the findings could actually have practical value in a proceeding - and in which jurisdiction.

Searching for assets without a defined scope becomes an endless task. The first stage was not to search, but to define the frame - and to record it in writing before work began.

The main work of the first ten days was reconstructing the corporate network. Not a search for assets, but building a scheme: what structures exist, how they relate to the former project, and what roles were held by the persons involved in it.

The work was carried out on legally available grounds separately in each of the five jurisdictions. Luxembourg and Germany disclose corporate information to a significant extent. Cyprus discloses data in one format, and information on beneficial owners in another, with access limitations. In the UAE, the volume of public data depends on the registration zone. Singapore maintains an open company register with limited disclosure of participants. There is no single methodology here - there is a separate assessment of what is admissible and a general system of cross-referencing.

By the end of the stage, a network of eleven structures connected to the former project on verifiable grounds had been reconstructed, along with seventeen connections between them and the participants in the original relationships. Connections were recorded with an indication of exactly what confirms each one: official disclosure, coincidence of corporate events in time, or analytical conclusion.

Matches were checked rigorously. In structures of this type, shared surnames, common corporate administration addresses and automatic links in aggregators create a plausible but false picture. Every material node required confirmation on several independent grounds, and mismatches were recorded on equal footing with matches.

Separately, reverse work was carried out: for each connection, a lawful explanation that would resolve the question was sought. Some nodes fell away precisely for this reason - an ordinary reorganization, the work of a shared corporate administrator, a historical connection with no current significance. This was also included in the report.

A map without a reliability assessment is useless: it either overstates capabilities or conceals risk. For this reason, each of the seventeen connections was assigned a confirmation level, and these levels were kept explicitly separate.

First level - confirmed connection. Official disclosure or documentary basis requiring no interpretation. A lawyer can use such items directly in proceedings, subject to the law of the relevant jurisdiction.

Second level - probable connection. A convergence of several independent indications, each insufficient on its own: a sequence of corporate events, coinciding administration structures, correlation of activity. Such items are suitable for building a strategy and for enquiries, but not as an independent basis.

Third level - assumption. A single indication or a logical reconstruction without independent confirmation. These items are included in the material precisely as assumptions and are explicitly marked as such: presenting them as fact would undermine confidence in the entire map.

This kind of labelling produces an unwelcome but useful effect. Some findings that appear striking are, under honest classification, placed at the second or third level. The fund's committee sees this immediately and does not build a strategy on something that will not withstand scrutiny in proceedings.

What has been found matters only where something can be done with it. For this reason, the asset map was overlaid onto a jurisdiction map - and this proved to be the most useful part of the material.

For each of the five jurisdictions, three parameters were recorded: the volume of lawfully accessible information, the availability of procedures applicable to the type of interest identified, and the practical difficulty of using them. These parameters diverge significantly: a jurisdiction with excellent disclosure may have a burdensome procedure, while a closed one may unexpectedly offer a workable mechanism.

The result of this overlay changes priorities. The largest interest by valuation may turn out to be in a jurisdiction where the practical route is long and expensive, while a more modest one may be located where action is realistic within a reasonable timeframe. A fund that makes decisions based on the aggregate value of findings is almost always wrong.

The limitation must be stated directly here. BLACKFILE did not provide legal opinions and did not assess the prospects of specific procedures. We described what information is accessible and what types of measures exist in principle in each jurisdiction. Applicability to a specific matter, the choice of procedure and the assessment of chances are the work of the fund's legal advisers in the relevant countries.

A separate point in the material concerned what cannot be achieved. Neither seizure, nor an interim measure, nor the return of funds is a result of analytical work and none can be promised. Verification provides a basis for a decision, not the decision itself.

First. A check before proceedings is cheaper than proceedings without a check. A claim filed without understanding where economic activity persists is a cost with an unpredictable outcome. An asset map costs substantially less than a year of litigation in the wrong jurisdiction.

Second. The absence of property in financial statements does not mean the absence of interests. Asset write-offs and the wind-down of operations are accounting and corporate events. Economic activity exists separately from them, and it is economic activity that needs to be checked.

Third. Jurisdiction matters more than the amount. Priority is determined not by where more was found, but by where something can actually be done. This is the most frequent and most costly miscalculation in an independent assessment of findings.

Fourth. Marking reliability is mandatory. A report without a division into confirmed, probable and presumed cannot be used: it either leads to incorrect expectations or to giving up on real opportunities.

Fifth. A connection does not equal ownership. An established economic interest is grounds for legal assessment, not a statement of ownership. Public statements made on this basis create risk for the person making them.

Sixth. The result depends on the source documents and jurisdictions. Twenty-one days in this matter is not a standard: with a different structure configuration and a different set of countries, the same work may take substantially longer or yield substantially less.

Indicators of the task that an asset map addresses before a procedure begins. This is not a diagnosis and not a promise of result.