United Kingdom

Details

  • Service: Advisory, Transactions & Restructuring, Restructuring
  • Industry: Financial Services
  • Type: Business and industry issue
  • Date: 24/06/2013

FAQ's: rejection of client money, creditor and client asset claims 

Please note that this FAQ is intended as guidance only in relation to the Rules (as defined below) and The Investment Bank Special Administration (England and Wales) Rules 2011 (the “SAR”), insofar as they relate to the rejection of claims.  This FAQ should not be considered a substitute to reading the Rules and SAR themselves.  You should consult your own legal and other professional advisors for advice in relation to your claim.
 

Why are the Administrators sending rejection letters and emails now?

 

The Administrators are sending rejection letters and emails now with a view to being able to pay a distribution of client money and an unsecured dividend to clients with agreed claims later this summer. 

 

Further information about the proposed distributions was given in the Administrators’ notice dated 12 June 2013. 

 

What are ‘the Rules’ and what is the Client Money Distribution Order?

 

On 11 June 2013, the High Court made an order which prescribes a procedure by which client money held by MFGUK should be distributed to clients (the “Client Money Distribution Order”).  The rules governing the client money distribution procedure are set out at Schedule A to the Client Money Distribution Order (the “Rules”). 

 

A copy of the Client Money Distribution Order, including the Rules, is available by clicking here (PDF 112 KB).  The Rules state that appeals against the rejection of client money claims must be made using Form 1.   

 

  

Why have I received a rejection letter or email?

 

The Administrators have written to customers rejecting some or all of their claims submitted in MFGUK’s special administration as follows:

 

Client Money Claim: The Administrators will have written to you rejecting a client money claim if: (a) you submitted a client money claim in MFGUK’s special administration (the “Client Money Claim”) and, (b) after reviewing the books and records of MFGUK and the evidence supplied by you in support of your Client Money Claim, the Administrators concluded that you do not have a “client money entitlement” within the meaning of Chapters 7 and 7A of the FSA’s Handbook in relation to the amounts claimed in your Client Money Claim. 

(Please note that the rules which apply to MFGUK are those which were in force as at 31 October 2011 and not the current version of the rules administered the Financial Conduct Authority.)  Pursuant to the Rules, if the Administrators reject a client money claim, the Administrators are required to notify that client in writing of the rejection of its client money claim and of the reasons for doing so.

 

Creditor Claim: If you submitted a general unsecured creditor claim in MFGUK’s special administration (the “Creditor Claim”), and after reviewing the books and records of MFGUK and the evidence supplied by you in support of your Creditor Claim, the Administrators have concluded that you do not have a creditor claim, the Administrators have written to you to reject your Creditor Claim.  Pursuant to The Investment Bank Special Administration (England and Wales) Rules 2011 (the “SAR”), if the Administrators reject a creditor claim, the Administrators are required to notify that creditor in writing of the rejection of its claim and of the reasons for doing so.

 

Client Asset Claim: If you submitted a client asset claim in MFGUK’s special administration (the “Client Asset Claim”), and after reviewing the books and records of MFGUK and the evidence supplied by you in support of your Client Asset Claim, the Administrators have concluded that you do not have a Client Asset Claim as defined by section 232(4) of the Banking Act 2009, the Administrators have written to you rejecting your Client Asset Claim.

 

 

What do I need to do upon receipt of a rejection letter or email?

 

Client Money Claim:

 

If you agree with the Administrators that you do not have a valid Client Money Claim, then you do not need to take any steps in relation to the rejection of your Client Money Claim.

 

If you wish to appeal the rejection of your Client Money Claim, you may apply to the High Court in England and Wales under Rule 4 (Appeal against decision on proof) of the Rules for the decision of the Administrators to be reversed or varied. 

 

The application must be made in the prescribed form, Form 1 (PDF 101 KB) to David Richards J in the High Court of Justice, Chancery Division, Companies Court in the MF Global UK Limited special administration proceedings with number 9527 of 2011.

 

The application must be made within 21 days of the date on which you received your rejection notice and, in accordance with the Rules, must be served on the Administrators without delay using the contact information set out below. 

 

Subject to the power of the court to extend the time, no application to reverse or vary the Administrators’ decision to reject your Client Money Claim will be entertained after the expiration of 21 days from the date on which you received your rejection notice.

 

Irrespective of the date on which you received your rejection notice, if the Administrators do not receive notice of an appeal by the later of either (i) 17:00 London time on the last date for proving (19 July 2013); or (ii) 30 days after the date of the rejection notice, the Administrators will make distributions on the basis that you have no client money entitlement and therefore have no client money claim. 

 

Any notices or legal proceedings to be sent or served on MFGUK or the Administrators must be emailed to mfglobalclaims@kpmg.co.uk with a hard copy delivered for the attention of the Administrators to: MF Global UK Limited (in special administration), 5 Churchill Place, London, E14 5HU, England.

 

Creditor Claim:

 

If you agree with the Administrators that you do not have a valid Creditor Claim, then you do not need to take any steps in relation to the rejection of your Creditor Claim.

 

If you wish to appeal the rejection of your Creditor Claim, you may apply to the High Court in England and Wales under SAR 157(1) (Appeal against decision on proof) for the decision of the Administrators to be reversed or varied. 

 

The application must be made to David Richards J in the High Court of Justice, Chancery Division, Companies Court, in the MF Global UK Limited special administration proceedings with number 9527 of 2011.

 

The application must be made within 21 days of the date on which you received your rejection notice and must be served on the Administrators without delay using the contact information set out below.

 

Subject to the power of the court to extend the time, no application to reverse or vary the Administrators’ decision to reject your Creditor Claim will be entertained after the expiration of 21 days from the date on which you received your rejection notice.

 

Irrespective of the date on which you received your rejection notice, if the Administrators do not receive notice of an appeal by the date on which they declare a dividend, they are likely to pay the dividend on the basis that you have no creditor claim. 

 

Any notices or legal proceedings to be sent or served on MFGUK or the Administrators should be emailed to mfglobalclaims@kpmg.co.uk with a hard copy delivered for the attention of the Administrators to: MF Global UK Limited (in special administration), 5 Churchill Place, London, E14 5HU, England.

 

Client Asset Claim:

 

If you agree with the Administrators that you do not have a valid Client Asset Claim, then you do not need to take any steps in relation to the rejection of your Client Asset Claim.

 

If you do not agree with the Administrators’ determination in relation to your Client Asset Claim and wish to contest the rejection of your Client Asset Claim, please notify the Administrators in writing and set out the grounds for your objection. 

 

The Administrators’ contact details for these purposes are: by email to mfglobalclaims@kpmg.co.uk with a hard copy delivered for the attention of the Administrators to: MF Global UK Limited (in special administration), 5 Churchill Place, London, E14 5HU, England.

 

 

I have only received a rejection letter or email regarding some of my claims, does this mean that all of my other claims are valid?

 

The correspondence you have received is a rejection of all the claims which you have submitted that the Administrators have concluded are not valid.  It does not automatically agree any other claims which you may have. 

 

Any claims which the Administrators accept will be dealt with via a settlement agreement issued by the Administrators.  If you have not received a settlement agreement in respect of any claims which have not been rejected, then please email mfglobalclaims@kpmg.co.uk.

 

 

It says in my rejection letter or email that I have received a Settlement Agreement but I cannot locate this document?

 

If you would like a further copy of your Settlement Agreement please email mfglobalclaims@kpmg.co.uk requesting a copy of this document and one will be emailed or posted to you. 

 

 

I have not received a rejection letter or email.  Does this mean all of my claims are valid?

 

The Administrators have not yet reviewed all claims which have been received.  As such if you do not receive a rejection letter this does not mean that your claims submitted are valid.  The Administrators will be in touch shortly with either a settlement agreement or a rejection letter in respect of all client money claims and unsecured creditor claims which have not yet been reviewed.

 

 

The rejection of client asset claims

 

In view of their intention to pay a distribution of client money and an unsecured dividend within two months of 19 July 2013, the Administrators are currently focussing on processing client money claims and unsecured creditor claims. 

 

As a result, the Administrators are not currently prioritising the rejection of client asset claims from customers whose only rejection would be a client asset claim.  The Administrators intend to process such rejections after they have dealt with client money claims and unsecured creditor claims.

 

 

I still have other questions in relation to the rejection letter or email received.

 

If you have any other questions in relation to the rejection letter received then please either email mfglobalclaims@kpmg.co.uk or call +44 (0) 20 7785 0308, where a member of the Administrators’ staff will be able to assist.

 

MF Global UK special administration

Contact information

For all non-press enquiries on MF Global UK Limited please email the following:

 

Claim queries 

mfglobalclaims@kpmg.co.uk