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Administrators net £6.4m as six-year failed broker saga nears end

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Administrators net £6.4m as six-year failed broker saga nears end

 

The High Court has given the green light to the administrators of failed firm Pritchard Stockbrokers to distribute £23.5 million of client assets, bringing a six-year saga to an end.

Pritchard fell into administration in 2012 and since then the special administrators, Mazars, have racked up £6.4 million in costs.

Over the six years they have been working to wind up the company, the administrators have agreed to claims of £25.8 million for 6,356 clients.

Together with the 2,387 clients who agreed their claims at nil value, this makes up 97% of potential claims by value.

However, the administrators have said that there has been no agreement regarding 2,463 clients, whose claims can go up to over £810,000. A final distribution to clients could not be made until this was resolved.

At 31 August, £12.9 million had been distributed to clients by the administrators. Meanwhile the FSCS has paid some £9.4 million to over 2,088 clients.

In a hearing earlier this month, Judge Alastair Norris ruled that the administrators could make the final distribution without committing breach of trust.

He said: ‘The objective of the special administration process is the return of client assets as soon as is practicable. The process in the instant case has lasted more than six years.

'By a careful strategy the process has reduced the potential claimants to an unresponsive 22% rump with claims to only 3% of the client money pool. Many of the outstanding individual claims are so small that the view may properly be taken that the unpursued claims are abandoned.'

He added: ‘In relation to claims of more substance the view may properly be taken that the need for finality is much greater than the need to preserve hitherto unpursued claims.

'Those who now receive a final distribution are entitled to regard it as their own (and not exposed to some claim to follow or trace into it by a hitherto unresponsive client). It is undoubtedly time for the book to be closed.’

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