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Administrators to make full return to creditors of stockbroker

HARRISONS ADMINISTRATORS are likely to make a full return to 99% of creditors of collapsed stockbroker Fyshe Horton Finney in one of the fastest repayments of a special administration. 

Paul Boyle, and David Clements from Harrisons were appointed joint special administrators to the failed stockbroker on 20 March. This type of administration was created to make a quicker return to creditors in the event of a collapse, of an investment type business. 

Due to the complex nature of investment banks such as MG Global and Pritchards, full repayment has taken longer than six months.

The Harrisons administrators said they are likely to return £10.9m out of £16.5m creditor claims (66%) but predict an effective full repayment to creditors by December, following an agreement with the Financial Services Compensation Scheme (FSCS).

The FSCS will compensate creditors that qualify with £50,000 payments.
Established in 1896, Fyshe Horton Finney was one of the country’s oldest regional stockbrokers, operating 15 offices across the UK.

At the time of their appointment FHF was the fourth special administration, since its introduction in February 2011, behind MF Global, Worldspreads and Pritchard Stockbrokers.

Paul Boyle, head of national practice at Harrisons, said: “Based on our current understanding, we estimate that 99% of non-corporate clients will recover in full all of their pooled money.

“The position is less clear for corporate clients and they will need to take advice on their possible entitlements under the FSCS guidelines.”

Special administration rules were introduced post-Lehmans, with the intention of speedier resolution of investment business insolvencies. The regime should help the administrators focus on three tasks: making a swift return of client assets; ensuring timely engagement with authorities; and rescuing the business as a going concern, or winding it up in the best interests of the creditors.

KPMG administrators were the first to be appointed special administrators following the collapse of MF Global in November 2011. However, that administration remains ongoing.

 

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