Regulation  

Failed broker administrator invites ‘missing’ £300k claims

The administrators of London-based broker and small-cap equity dealer City Equities is set to publish a notice in local and national press to invite missing investors who have not yet submitted their claim to do so or they may miss out altogether.

As previously revealed by FTAdviser, a special administration order in respect of City Equities Ltd was granted on 16 October 2013 during an out of hours hearing after the directors made an urgent application on the same day, special administrators UHY Hacker Young said.

It added that Bird & Bird have been appointed adviser to the administrators.

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The special administration application was made following previously unsuccessful attempts to recapitalise City Equities under the Financial Conduct Authority’s capital adequacy rules.

The bar date, 5:00pm on 21 March, gives time for the remaining investors to be able to calculate and submit their claims, the joint special administrators said.

James Moore, part of the Bird & Bird restructuring and insolvency group team advising on the matter, clarified that the purpose of a bar date is to get clients’ assets back to the clients as quickly as possible.

Mr Moore added there are currently 30 clients left who have not claimed who have a total asset pot of £300,000 in total.

He said: “The bar date allows the [administrator] to make provisions and see if there could be shortfalls. It also makes clients aware they need to formulate and submit claims.

“We are not expecting a shortfall in client equity. As yet, we don’t know whether client monies will be returned as it is more complicated [than equities].

“There were originally circa 300 active clients although the bar date is likely to impact on about 30 clients and an asset pot remaining of circa £300,000.”

The bar date notice, seen by FTAdviser, also warned that investors who do not respond within the bar date without a “justifiable reason” may lose their right to the asset and become an unsecured creditor in this matter.

Joss Hargrave, partner and head of Bird & Bird’s UK restructuring and insolvency group, previously told FTAdviser that City Equities has approximately £7m in client assets.

In 2012, client assets amounted to a little less than £20.2m and £27m in 2011. Mr Hargrave added it was thought the £13m drop in the last year would be accounted for by monies returned to clients as part of normal trading and also as part of the wind-down plan.

Investors who believe they have a claim can submit it electronically to UHY Hacker Young, or by post, using the downloadable form on the UHY Hacker Young LLP website set up for City Equities Limited, attaching all supporting documentation.

UHY Hacker Young is set to publish a bar date notice in the London Gazette, The Times and send a notice to the FCA.