KPMG ADMINISTRATORS have been called in by the Financial Services Authority to handle the world's first special administration of the eighth-largest corporate collapse in history, MF Global UK.
Richard Fleming, Richard Heis and Mike Pink, partners at KPMG, were appointed joint special administrators to the bank following a decision taken by MF's board.
The special administration regime (SAR) was created in February following the collapse of Lehman Brothers.
The SAR process entails the administrators completing three tasks: making a swift return of client assets; timely engagement with authorities; and to rescue the business as a going concern, or to wind it up in the best interests of the creditors. A regular administration involves the latter, but not the first two objectives.
The KPMG administrators are appointed to MF Global UK and MF Global UK Services, which provides employee pension services. It is a wholly-owned subsidiary of MF Global Europe, which is a subsidiary of MF Global.
MF Global filed for Chapter 11 bankruptcy in the US this week.
Fleming said: "Against the backdrop of challenging market conditions and the eurozone crisis, the financial position of MF Global UK has significantly deteriorated in recent weeks. Following the filing for Chapter 11 by MF Global Holdings USA Inc, it would not be viable to operate MF Global UK Ltd on a standalone basis.
"The UK and overseas operations of MF Global UK Limited have ceased trading and the joint special administrators are working with the regulatory authorities, clearing systems and other counterparties in relation to the orderly wind down of the trading operations."
The FSA can direct the special administrators to prioritise certain objectives but must consult HM Treasury and the Bank of England beforehand.
There are currently 725 people employed by the business in the UK with the administrators confirming there will be redundancies shortly.
The real issue in winding up process how u safe guard the assest v/s creditors and declaratin of inslovency in the court of law under this Greek default of debt trap.
The interest on investment and creditors liabilities could only materialised if euro currency has a weighted that is value of money in winding up process. if swfit interest rate is low on the investment which is obviously under this circumstances would have adverse affect on the realization of sale proceeds to be paid to the creditors in first options . The promoters has an last option to resolve . If realisatin of sale process is less and currency of rate of particualr date is low then creditors would be paid with ratio of thier liabilities .
THE KPMG consultant would give an report how this adminstration would be affect how we proceed to do it and after submission of their report the General adminstrations would do the implement stage to get realziation of sale proceeds of all the moveable and non moveable in the Media print and their payments so on. It is very difficult and long duration process . In western countries it is easy to declare inslovency in court of law with specifications laws and rules.but in the south asian countries to declare insolvency is very cumburssome process and difficult to digest what I mean that company want to show inslovency as insolvency act they have to apply in the court. what I mean to say that if liquidations is completed but after the court the creditors do not leave u after declaration of insolvency law.
so in nut shell it is very diffiult to do so.
Posted by: hameed.boolani, 02 Nov 2011 | 11:46
as my previous comments I want to add up by saying that finalization is going on and it take time to redress the core issues and would be inform to the to the board very soon.
Posted by: ABDUL HAMEED BOOLANI, 03 Nov 2011 | 09:07
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