Reyker Securities admins process first and second distribution for 97% of client plans
The joint special administrators (JSAs) of Reyker Securities have published their latest progress report, which covers the six month period from 8 April 2022 to 7 October 2022.
The JSAs declared a second interim distribution of Client Money in November 2021 which meant that over 99% of Clients (who are FSCS Protected Claimants) could receive up to 98.25% of their Client Money.
During 2022, the JSAs have continued to process first and second distributions as and when Clients and/or their respective brokers (where applicable) complete the required outstanding actions.
- The JSAs have now processed a first and second distribution for circa 97% of Client plans (previously 95%) where a valid claim and CMIF has been received.
- This equates to distributions totalling approximately £54.1 million (being 96% by value of the maximum amount of Client Money that can be distributed at this time and 94% of the total CMP value).
- The JSAs continue to retain a provision of 1.75% of the CMP for new or increased claims that could be received until the Client Money Pool is closed to claims.
For the small minority of Clients who are not FSCS Protected Claimants (or yet to confirmed as such), being less than 1% of all Clients, an additional 11% of Client Money was retained as a provision against their potential share of costs for the Client Money Distribution. These Clients are therefore able to receive up to 87.25 pence in the pound across both the first and second distributions.
If you believe you have not yet received a first and/or second distribution of Client Money, please contact firstname.lastname@example.org as further action may be required.
The JSAs need to formally close the CMP to further, new or increased, Client claims prior to settling final costs and returning the residual balance of Client Money; this is necessary to protect all participating Clients, the Company and the JSAs.
Following legal advice and discussions with the Creditors’ Committee, the JSAs consider the most appropriate way to do this is by way of an application to Court to set a Hard Bar Date, being a final date by which any claims to Client Money must be made by any party. After the Hard Bar Date, the CMP would be closed to new or increased claims and the JSAs would be able to distribute 100% of Client Money claimed by Clients (after deduction of the share of costs for Clients who are not FSCS Protected Claimants) without risk of disruption.
The JSAs have previously outlined the very high threshold required to be met for a Hard Bar Date order to be made, being that the court is satisfied that there is no reasonable prospect of the JSAs receiving a claim for the return of Client Money after that date.
Despite the extensive client tracing program undertaken by the JSAs during 2021 and more recent supplementary efforts, there remains more than 800 Clients still to submit a claim to their share of Client Money and new claims continue to be received each month.
Given the above, the JSAs and their legal advisors consider it is still too early to apply to Court for a Hard Bar Date to be set as they are not satisfied that, at this time, it would be possible to evidence to the Court that there is no reasonable prospect of any further claims to Client Money being received. An application at this time would therefore risk application costs being wasted and, potentially, result in additional hurdles being set by the Court before another application for a Hard Bar Date could be made.
The JSAs will continue to monitor the rate of new Client claims received and keep the timing of any application for a Hard Bar Date under review.
Clients that are yet to submit a claim to Client Assets and/or submit a CMIF (confirming their distribution instructions) are encouraged to do so immediately in order to expedite the distribution of Client Money for both themselves and other Clients. This can be done via the Portal or by contacting client services on 0800 048 9512 or by email at email@example.com.
Based on legal advice, the JSAs’ preferred strategy is, at the right time, to set a Hard Bar Date in accordance with the SAR and to declare a third and final distribution of Client Money shortly thereafter. This provides certainty of all claims against the CMP and ensures there is no risk of disruption in the event a material, unforeseen claim arises after any final distribution to Clients.
The JSAs are, however, mindful that, given the number of Clients yet to submit a claim to Client Money (now totalling approximately £960k) and the fact that new claims continue to be received each month, it could be another 12 to 18 months or, conceivably, much longer before they can evidence to the Court there is no reasonable prospect of a further claim to Client Money being received and this remains outside the JSAs’ control.
Accordingly, the JSAs have been working with their legal advisors and the FSCS to establish a strategy where a third and final distribution can, potentially, be safely paid to all Clients that have submitted a valid claim (i.e. a claim and CMIF) prior to a Hard Bar Date being set. Potentially several months or even years before a Hard Bar Date.
If successful, this would enable an earlier return of 100% of Client Money for the majority of Clients that have engaged with the distribution process but still provide an opportunity for new claims to be received, agreed and paid, ensuring neither set of Clients are unfairly prejudiced.
Mark Ford, Adam Stephens and Henry Shinners of Smith & Williamson LLP were appointed Joint Special Administrators of Reyker Securities Plc (in Special Administration) on 8 October 2019.