United Kingdom

Details

  • Service: Advisory
  • Date: 29/11/2012

MF Global UK administrators publish second six month progress report 

The special administrators of MF Global UK Limited (in special administration) (“MFG UK”) have published their second six month progress report on activity to date, in accordance with statutory requirements.

 

Richard Heis, joint special administrator of MFG UK and restructuring partner at KPMG, commented:

 

“We have seen some substantial progress made since our last progress report six months ago.  In excess of £1 billion of assets have now been recovered into the house estate, while client assets and monies of some $923 million have been recovered.  Statements in draft or final form have been sent to 95% of all trading customers, and over $179 million has been distributed to them.  We have resolved approximately half of the 1,300 disputed claims regarding segregated and non-segregated account classifications.  Seventy MF Global UK employees have been retained until at least 30 April 2013 to work alongside the KPMG team working on this complex case.”

 

Latest developments in the case:

 

Returning client monies/assets

  • The special administrators have recovered in excess of £1 billion into the house estate (previous report: £509 million)
  • Recoveries of client monies and assets stand at in excess of $923 million (previous report: $918 million)
  • As at 30 October 2012, $179.3 million has been distributed to 2,362 clients (previous report: $92.1 million)
  • Statements in draft or final form have been sent to approximately 95% of all trading customers
  • As at 30 October 2012, £23.6 million of client assets had been returned to clients
  • A total of 125 client asset, client money and creditor claims with a value of approximately $5 billion have been rejected by the special administrators

 

Segregated versus non-segregated issues

  • The special administrators, working in conjunction with MFG UK management and staff have resolved 650 out of approximately 1,300 disputed claims (c.49%)
  • The remaining disputed accounts are under investigation, and the special administrators are working closely with legal counsel to determine the appropriate status of these accounts

 

Legal and US issues

  • The special administrators have made an application to the High Court to determine whether a client’s client money entitlement in respect of an open position is to be valued as at 31 October 2011 by reference to the market value or any mark-to-market value as at 31 October 2011 or by reference to the liquidation value.  The application was heard on 30 and 31 October 2012 and we are awaiting judgment
  • MF Global Finance USA Inc. (“Finance USA”) served a claim for an amount of “at least $235.7 million” on 2 October 2012.  The special administrators served their defence on 23 November 2012 and Finance USA have until 7 December 2012 to reply.  A further directions hearing is scheduled for 14 January 2013

 

Creditors’ committee and fees

  • The special administrators have agreed a discounted fee structure with the creditors’ committee as a result of which costs of the special administration from 31 October 2011 – 30 April 2012 were reduced to £28.8 million (a reduction of £10.3 million) from the amount reported in the special administrators’ first six months progress report
  • In the six month period to 30 October 2012, the special administrators incurred time costs of £22.9 million, representing 68,497 hours of work
  • Total fees and disbursements paid to the special administrators and their affiliates to date stand at £41.2 million (previous report: £17.5 million)

 

-Ends-

 

Media enquiries to:
Mark Hamilton, KPMG Corporate Communications   020 7694 2687

 

KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff.  The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  KPMG International provides no client services