Following the first estimated outcome published on 29th June 2012, special administrators today publish updated illustrative financial outcome range of potential returns for clients and creditors of MF Global UK.
The special administrators of MF Global UK have published an updated illustrative financial outcome range of potential returns for clients and creditors of MF Global UK today. This follows the first estimated outcome published on 29th June 2012.
In terms of total funds, the high end of the estimated range would see some $3.2bn of funds recovered (this is unchanged from the first estimated outcome published) while the low end of the estimated range would amount to some $3bn (previously $2.8bn). In terms of claims against these funds, the low end of the estimated range would amount to approximately $3bn (this is unchanged) while the high end of the estimated range would amount to $3.6bn (previously $3.9bn).
Richard Heis, joint special administrator of MF Global UK and restructuring partner at KPMG, commented: “The narrowing of the range of outcomes is as a result of progress made in realising estate assets and also agreeing liabilities with claimants. As published in our first estimated outcome statement, a full pay out is possible. However there are still two significant hurdles in defining the ultimate distribution on claims: resolving the treatment of close-out losses on the RTM portfolio between MF Global UK and MF Global Inc and securing the return of the remaining funds from financial institutions.
“Unfortunately, given the huge amount of legal uncertainty around claims against the estate, we will not be able to increase the 26¢ in the $1 paid to MF Global clients nor pay a dividend to unsecured creditors. One key issue to be resolved is establishing the extent to which the recent ruling of the Supreme Court on Lehman Brothers will mean that funds currently in the unsecured (or House) pool could be subject to tracing for the benefit of the segregated client money pool. Another key legal issue is the appeal by the Chapter 11 Trustee of MF Global Finance USA Inc, against our rejection of its claim. However, both issues are being progressed and it is our ambition to make a substantial distribution to clients and creditors in 2013.”
Further details on the estimated outcomes prepared by the special administrators and a timetable of court hearings are available at: www.kpmg.co.uk/mfglobaluk.
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For further information please contact:
Gavin Houlgate, Director of Communications at KPMG
T: +44 20 7694 3902
KPMG Press Office: 020 7694 8773
Notes to Editors:
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:
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 150 countries and have 138,000 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.
Richard Fleming, Richard Heis and Mike Pink of KPMG LLP were appointed as the "Joint Special Administrators" of MF Global UK Limited following an application to the High Court in London by the directors of MF Global UK Limited on Monday 31 October 2011.
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.