The special administrators of MF Global UK have published an updated estimated outcome for creditors. While the estimated outcome is contingent on the agreements made with the US MF Global entities in December 2012 becoming unconditional, the estimated outcome indicates a potential first interim distribution of 40p in the £1 for unsecured creditors should this be declared (the previous statement published on Tuesday 8th January indicated a potential first interim distribution of 20p in the £1). The estimated increase in the distribution to claimants entitled to share in the client money pool, to 60c in the $1 (from 26c in the $1)*, as previously published, remains unchanged.
Richard Heis, joint special administrator of MF Global UK and restructuring partner at KPMG, commented: “We are pleased to be able to announce further improvements in anticipated distributions to MF Global UK‘s customers, in particular a potential increase in the first interim distribution to unsecured creditors. This increase has largely resulted from further progress made by the joint administrators in agreeing client claims.”
It is important to note that the US settlements are conditional upon three factors: US Bankruptcy Court approval; the withdrawal of the MF Global Finance USA Inc claim and the withdrawal of one financial institution’s claim and return of funds to MF Global UK. The first of these conditions was met following US Bankruptcy Court approval of the US settlements on 31 January 2013.
The special administrators aim to make the payments to clients and creditors shortly after the conditions are satisfied and the settlement agreements become effective. However, it is not possible at this stage to give a guide on the timing of when the agreements will become effective. The estimated outcome can be found at: www.kpmg.co.uk/mfglobaluk.
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Notes to Editors:
*For the purposes of clarity, the segregated pool is denominated in dollars and the unsecured pool is denominated in pounds sterling.
Richard Fleming, Richard Heis and Mike Pink of KPMG LLP were appointed joint special administrators of MF Global UK Limited, a UK based broker-dealer business, and MF Global UK Services Limited, which provides employee and pension services in relation to the UK operations, at 5pm on Monday 31st October 2011. MF Global UK Limited is a wholly owned subsidiary of MF Global Europe Limited which in turn is a subsidiary of MF Global Holdings Limited, a company incorporated in Delaware, USA, which filed for chapter 11 bankruptcy protection on 31st October.
The objectives of the administration are:
To ensure the return of client assets as soon as is reasonably practicable;
To ensure the timely engagement with market infrastructure bodies and the Authorities pursuant to regulation 13; and
To either rescue the Investment Bank as a going concern or wind it up in the best interests of creditors.
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 12,000 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2012. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 156 countries and have 152,000 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.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.