The special administration of failed stockbroker Pritchard continues to roll on, as fees claimed by administrator Mazars have breached the £5 million mark.
A £3.1 million cash shortfall remains in place because £26.6 million worth of client claims have been made, while only £23.5 million of pooled client assets have been recovered. This picture could worsen after it emerged that a further pooled client money claim could exceed £6.3 million.
Mazars said no claim has been received yet in relation to this sum and there has been no response to correspondence, so it anticipates having to deal with this claim in court.
Mazars has pocketed £5.2 million in fees after logging 21,333 hours so far in the special administration, at an hourly rate of £243. This represents an increase from £240 per hour earlier in the year. Pritchard went into administration in March 2012.
Over the six months to 8 September, Mazars settled a further 86 claims, amounting to £400,000, while the Financial Services Compensation Scheme (FSCS) had paid out a total of £8.9 million to 2,668 clients. The administrator noted that it anticipates the majority of Pritchard clients should be entitled to make claims to the FSCS for any losses suffered.
Overall, Mazars has settled 6,313 claims, amounting to £25.2 million. By value, the administrators have agreed more than 95% of client claims. However, 2,828 clients, accounting for £1.3 million, have not yet agreed their claims.
‘Regrettably, at this stage, it is not possible to provide a definitive timescale for the duration of the special administration,’ Mazars noted in an update.
The administrator also recovered £50,500 out of a total £915,338 of outstanding debt owed to clients over the six months to 8 September. Elsewhere, it noted that debts of £58,575 have been written off due to the costs associated. There are £504,748 of outstanding debts that are still being pursued.
In an effort to accelerate the wind-up of Pritchard, Mazars has been advised by its solicitors to issue final chasing correspondence for outstanding claims of more than £1,000. It has now completed its schedule of tasks and has held preliminary discussions with the Financial Conduct Authority ‘in respect of the adequacy of the work undertaken’.
Wealth Manager revealed earlier this year that no recoveries would be made from former Pritchard secretary Craig Whyte, who previously owned Rangers Football Club, in relation to £846,020 of guarantees to support its ongoing trading and £250,000 via his directorship of Tixway. Following a final meeting with creditors on 17 August, Mazars confirmed that Tixway has been dissolved and no recoveries have been made.
Mazars and the FCA declined to comment on the special administration.