Karl, a Dishonest Financial Adviser, Took Deposits from Clients as Part

Karl, a dishonest financial adviser, took deposits from clients as part of a Ponzi scheme. He told 'investors' that they were investing in high yield securities, but in fact he was using the money to fund his high living lifestyle. He kept very poor records. Having taken £5million from investors, he was declared insolvent. Karl's only remaining asset is a house which has just been sold for £500,000 and which had been purchased with investors' funds.
Which of the following statements most accurately describes the rights of investors?

A) Those who made the most recent investments will be paid first because the usual rule is 'first in, first out'.
B) Those who made the earliest investments will be paid first because the usual rule is 'first in, first out.'
C) The available assets will probably be distributed proportionately between those investors who can prove they made an investment.
D) Because there is no easy way of telling who owns what, the assets will be available for distribution between Karl's general creditors.