The special administrators of failed stockbroker Fyshe Horton Finney have said they will not be able to confirm the timing and size of the final distribution of client money until a legal dispute relating to a claim of £668,207 is settled.
The special administration of the company has been a long and complicated process, including debt chases in Australia, Hong Kong and Thailand.
The firm went into administration in March 2013 and David Clements and Paul Boyle of Harrisons Business Recovery & Insolvency were appointed to oversee it. Since then, the administrators have racked up almost £3 million in fees for a total of 11,571.23 hours spent on the case.
The duo identified approximately £1.5 million in outstanding debts owed to the business, of which £991,664 was due from clients.
According to the latest update, for the period between 20 March and 19 September, seen by Wealth Manager, the main disputed debt is estimated at £668,207. However, the debtor client claims that it is owed £499,695 for acting as a counterparty for Fyshe on a number of FX transactions.
The administrators said that solicitors are in the process of issuing proceedings for the recovery of £168,512 from the client, but they ‘will not be in a position to confirm the quantum of any future distribution on agreed client claims until this position is concluded’.
The investigation into this claim is continuing and the administrators have revealed that it has ‘necessitated the detailed review of electronic and paper records of the company, interview of former company staff and discussions with solicitors with regards to FCA and Cass rules’.
In the last update, the administrators said their solicitors were also still chasing £15,000 from two debtors in Australia and Hong Kong. However, they have now decided that they are ‘uneconomic to pursue’ further.
Meanwhile, the debtor in Thailand, who owes £384,000, has been located and solicitors are beginning proceedings to recover the amount.
All in all, the special administrators have been able to realise £436,992 from client debtors and despite the work of their solicitors, anticipate that ‘any further recovery of client debtors is unlikely’.
Since the start of the administration, the Financial Services Compensation Scheme has processed 2,521 client claims, paying out £13.1 million. During the period, 20 client claims were rejected while 319 claims have been listed as ‘no application received’.
The administrators added that they are continuing to investigate the events leading up to the company’s demise and will update creditors with further information in their next report. They have also now submitted a confidential report to the FCA on the actions of the directors prior to the company being placed into special administration.