LM Fund One Ltd. entered the Cayman Islands financial system in 2017 as a mutual fund built around alternative investment strategies and a promise of stable, risk-adjusted returns. Six years later, the fund was in court, facing liquidation after an investor said she could not obtain basic financial information or redeem her investment. What followed has become a cross-border liquidation involving Cayman Islands insolvency proceedings, U.S. discovery orders, multiple financial institutions and an unresolved trail of transactions involving millions of dollars.
At the center of the structure were Qiang Chen and Chi Sum Daniel Kan, who were directors of LM Fund One and also directors of its investment adviser, Airstream Investment Ltd. The fund was registered with the Cayman Islands Monetary Authority, or CIMA, under reference number 1367203. Airstream held 100% of the fund’s management shares, giving it voting rights, while investors held participating shares in Classes A, B and C.
The case began with investor Ning Du, identified in the court documents as a Beijing resident and shareholder. In November 2019, Du invested $160,000 in LM Fund One. She later redeemed $10,000 of principal and $5,200 in accrued profits, leaving roughly $150,000 invested. The fund’s offering documents contemplated regular redemption opportunities and quarterly investor reporting, but according to Du’s winding-up petition, those expectations eventually became difficult to exercise.
The problems became more serious in 2021. Du requested a $40,000 partial redemption in May of that year. According to the petition, Chen subsequently told her that redemption was impossible because loans of approximately $10 million to Marketland had defaulted. Months later, in December 2021, Marketland told Du that the loans had actually been repaid roughly 18 months earlier, around the middle of 2020. That contradiction became one of the central reasons Du questioned what had happened to the fund’s assets.
There was another complication. HC Global Fund Services, which had previously administered LM Fund One, told Du in December 2021 that it had stopped acting for the fund in February 2020 and that Circle Investment Support Services, later known as Bolder Fund Services, had taken over. Du said she had not been notified of the change. Bolder subsequently told her that administration services had been temporarily suspended and referred questions to Airstream. Bolder later confirmed that it had resigned as administrator effective March 17, 2022, citing Airstream’s failure to provide requested information and documents, failure to pay fees, and Bolder’s determination that Airstream was not properly regulated. Those statements are allegations and representations contained in the liquidation record, not findings that Airstream committed a criminal offence.
Du also contacted CIMA, raising concerns about the fund’s management, its failure to provide financial information and the difficulties surrounding redemption. The liquidators’ first report records that CIMA told Du on April 25, 2022 that it had not identified any regulatory breaches at that point, although it would continue reviewing the fund’s operations. That distinction matters: the later liquidation and asset investigation should not be presented as proof that CIMA had previously determined the fund was fraudulent or unlawful.
By August 2023, Du had petitioned the Grand Court of the Cayman Islands to wind up LM Fund One. She alleged that she had been the victim of fraudulent conduct and asked for independent liquidators to investigate the company’s affairs, secure its assets and pursue recovery if assets had been misappropriated or dissipated. The petition was not a criminal indictment and did not establish fraud as a fact. It was an investor’s application seeking court-supervised liquidation and investigation.
The Cayman court heard the petition on October 24, 2023. No one appeared on behalf of LM Fund One. The court ordered the company wound up and appointed Mark Longbottom and Michael Lam of KRyS Global as joint official liquidators.
The liquidators quickly encountered a company whose records were incomplete and whose financial picture extended well beyond the original dispute with Du. Their first report stated that Chen had been unresponsive despite repeated contact attempts, while Airstream itself had also failed to respond. Daniel Kan had been notified and the liquidators were awaiting books, records and information from him. The report also identified Widemax Holdings Limited as an entity associated with the directors and investment adviser, although emails sent to addresses connected with Widemax were undeliverable.
The financial numbers were significant. Based on the latest balance sheet available to the liquidators, dated October 31, 2020, potential assets were recorded at approximately $13.84 million. The largest item was $12.85 million in loans, interest and other receivables attributed to PT Nowrupiah Services Technology, an Indonesian company. The figure consisted of approximately $11.03 million in loans, $1.77 million in interest and about $52,500 attributed to foreign-exchange losses.
By the 2025 liquidators’ report, those loans remained a central unresolved issue. The liquidators said PT Nowrupiah’s previous registered office no longer appeared operational and correspondence remained unanswered. They also reported that communications with the directors were minimal, with Daniel Kan indicating that Chen had handled the fund’s day-to-day operations. The report stated that Chen had remained unresponsive to the liquidators’ enquiries throughout the liquidation.
Another $600,000 investment in LM Opportunity Fund SP raised questions because the liquidators’ preliminary investigation indicated that the vehicle might be associated with the directors. Redemption notices were filed in December 2023, but the 2025 report said there was still no information showing that the money would be returned. Airstream itself had meanwhile entered official liquidation, with Mitchell Mansfield and Samuel Cole of Kroll appointed as its joint official liquidators on December 18, 2023.
The liquidation has also uncovered an apparently duplicated redemption payment of $103,250 made to an investor. The liquidators said they were seeking recovery of the duplicate amount but had not received the necessary cooperation to complete the process. That issue is separate from the much larger loan investigation.
The scale of the potential shortfall became clearer in the 2025 report. LM Fund One’s creditors included approximately $126,000 owed to service providers and about $6.7 million in redemption claims. No distributions had been declared, and the liquidators said there were no distributable funds at that stage. The $13.84 million asset figure also cannot be treated as cash available to investors: it was based on a 2020 balance sheet, much of it represented disputed or unverified receivables, and the liquidators explicitly warned that values could have changed.
The investigation has now crossed into the United States. In April 2024, the liquidators sought discovery from East West Bank in the U.S. District Court for the Southern District of California, saying bank records were needed to investigate the fund’s financial transactions and potential causes of action. Documents obtained from the bank led the liquidators to seek additional discovery.
The U.S. Bankruptcy Court for the Southern District of Florida subsequently recognized the Cayman liquidation as a foreign main proceeding in October 2024. That recognition allowed the liquidators to pursue further subpoenas. By November 2025, five banks had responded to subpoenas, and the liquidators were analyzing transaction workbooks covering wire transfers. They said they were still reviewing the information and could not yet determine whether those investigations would result in recoveries.
There is also a wider pattern of insolvency proceedings around the same network. Airstream was wound up following a petition by I-Tiger Global Investment Management, which said Airstream owed approximately $310,000 under an investment advisory arrangement connected to Premier Life Settlement Fund SP, a segregated portfolio of Aquam Funds SPC. Separately, a petition was filed seeking receivers over Premier Life Settlement Fund SP. These proceedings do not establish that Chen or Kan committed fraud, but they demonstrate that the problems surrounding Airstream were not confined to LM Fund One.
The public record reviewed for this report does not establish that Chen or Kan has been criminally charged, convicted, or ordered to pay a criminal penalty in connection with LM Fund One. Nor does it show a finding by CIMA that the fund committed a regulatory offence before liquidation. What the record does establish is a court-ordered liquidation, substantial unresolved investor claims, an investigation into millions of dollars in loans and receivables, the collapse of the fund’s investment adviser, and continuing efforts to reconstruct financial transactions.
Chen’s present whereabouts and age could not be reliably established from credible public sources reviewed for this article. The most recent official liquidation report instead describes him through his former corporate role and says he has not responded to the liquidators’ enquiries. Kan remains identified in the liquidation records as a director, but the liquidators describe his communications as minimal. There is no reliable evidence in the reviewed record establishing that either man is currently operating LM Fund One or Airstream as an active investment business.
The significance of LM Fund One is therefore not simply the amount invested by one shareholder. It is the gap that can emerge between a financial product’s formal structure and the information investors ultimately receive when something goes wrong. A Cayman-registered fund, professional administrators, auditors, investment advisers and bank accounts can create an appearance of institutional protection, but those safeguards are only meaningful when records remain available, assets can be traced and investors can exercise the rights promised to them. In this case, the liquidation remains unfinished, the whereabouts and recoverability of approximately $13.8 million connected to the fund’s loans remain under examination, and investors have not yet received a distribution. The final explanation for what happened to the money will depend on the continuing forensic work and whatever further findings emerge from the courts and liquidators.
Source:
OffshoreAlert
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