MF Global UK Special Administration RTM application
Update 1 November 2012
The High Court handed down judgment in the RTM Application today in favour of the Administrators, following the substantive hearing on 23 October 2012. The Court ruled that MFG UK is the “non-Defaulting Party” under the GMRA between MFG UK and Inc, and that accordingly, it is MFG UK that is entitled to calculate the close out amount payable with respect to the repos to maturity performed under the GMRA. Mr Justice David Richards declared that,
“No Event of Default falling within paragraph 10(a)(vi) of the Global Master Repurchase Agreement (2000 version) between MFG UK and Inc, dated as of 19 July 2004, occurred in relation to MFG UK on the appointment by this Court, at 5pm (GMT) on 31 October 2011, of the Administrators to MFGUK or on the commencement of the hearing which led to that appointment.”
Inc has been denied permission by the High Court to appeal this decision.
A copy of the judgment and the sealed court order can be found via the links below.
Update 24 July 2012 – Details of Court hearing
At the hearing on 20 July 2012, Mr Justice David Richards gave directions for the future conduct of the RTM Application. MF Global Inc is to serve any evidence on which it intends to rely by 10 September 2012, and the Administrators are to serve any evidence in reply by 1 October 2012. The substantive hearing of the RTM Application is to take place on the first available date on or after 15 October 2012, with a time estimate of 1-2 days. A copy of the directions Order can be accessed via the link below.
On 4 July 2012, the Administrators made an application (the “RTM Application”) to the High Court seeking directions in relation to a claim made by MF Global Inc (“Inc”) in the administration of MF Global UK Limited (“MFG UK”) arising in connection with certain repo-to-maturity (“RTM”) transactions.
The RTM transactions concerned the repo of certain European debt securities by Inc to MFG UK (the “Inc Repos”), and the onward repo of those securities by MFG UK to clearing houses. The Inc Repos were governed by a Global Master Repurchase Agreement (“GMRA”), which provided that the net amount payable by one of the parties upon termination of the GMRA was to be determined by the “non-Defaulting Party”.Inc considers that it is non-Defaulting Party for the purposes of the GMRA, and the Administrators consider that MFG UK is the non-Defaulting Party. The RTM Application is made for the purposes of seeking the Court’s determination as to which of Inc or MFG UK is the non-Defaulting Party.
The Administrators filed a witness statement in support of the RTM Application. The purpose of the witness statement is to explain to the Court the background and structure of the RTM transactions. Copies of the RTM Application and the witness statement can be found via the links below.
A hearing for directions as to the future conduct of the RTM Application is scheduled to take place on 20 July 2012.
If you have any questions concerning the RTM Application, please contact the Administrators at firstname.lastname@example.org.
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For the latest updates from the special administrators of MF Global UK Limited please visit our dedicated page.
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