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News |
| Pacific Continental Securities
(UK) Limited (in Liquidation) |
| Date: 31 Aug 2007 |
Smith & Williamson is acting as the administrator in this case. Information for creditors is given below .
1. What has happened at Pacific Continental Securities (UK) Limited (in administration) ("Pacific" or the "Company")?
2. What has happened after the appointment of the administrators?
3. What is happening to client funds?
4. What is happening to client shareholdings?
5. How long will this take to resolve?
6. What can I do to help?
1. What has happened at Pacific Continental Securities (UK) Limited (in administration) ("Pacific" or the "Company")?
With effect from 5.30pm on 14 June 2007, the Financial Services Authority ("FSA") varied the Company's permissions under the Financial Services & Markets Act 2000, such that the Company was no longer authorised to undertake any regulated activity except to the extent necessary to close and settle existing client positions. In those circumstances, the Company was no longer able to conduct any new business with effect from 14 June 2007 and could not continue to trade.
The directors of the Company therefore resolved to appoint administrators, and the Company went into administration on 20 June 2007. Stephen Cork and Joanne Milner of Smith & Williamson Limited were appointed administrators.
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2. What has happened after the appointment of the administrators?
2.1 Sale of part of business and assets
The administrators were able to achieve a sale of part of the business and assets of the Company to Brooklands Securities Limited (formerly Caspian Stockbrokers Limited) ("Brooklands") shortly after the appointment of the administrators, realising some funds for the insolvent estate of the Company.
It should be noted that client funds and client shareholdings are not affected by the sale and have not been transferred to Brooklands.
2.2 Statement of proposals to creditors and initial creditors meeting
The administrators must usually circulate proposals, for voting on by the creditors, to creditors confirming what action they intend to take in the administration within 8 weeks of their appointment, and must call an initial creditors meeting within 10 weeks of their appointment.
A number of issues have prevented the administrators from meeting this timetable in respect of the Company. In particular, the Company's records are insufficient to allow the administrators to identify at this stage who the creditors of the Company are. This means that it would be very difficult to hold a fair voting process in respect of the administrators' proposals at this stage.
An application has accordingly been made to court for an extension of time to circulate proposals to creditors and to hold the initial creditors meeting. It is anticipated that the statement of proposals will be circulated, at the latest, by Wednesday 17 October 2007 and that the initial creditors meeting will be held , at the latest, by Wednesday 31 October 2007. Further information on the conduct of the administration will be included in the statement of proposals.
Provided the court approves it, the administrators will also seek to publish their statement of proposals on the Company's website If you have further queries please click here to email. rather than sending them by post to individual creditors. This should limit costs and will avoid problems caused by any uncertainty as to the identity of many of the Company's creditors.
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3. What is happening to client funds?
Prior to the appointment of the administrators, client funds were either held by the Company; by Saxo Bank A/S ("Saxo"); or by Man Financial ("Man").
3.1 Funds held by the Company
All known cash balances which were held directly by the Company on behalf of clients are now under the control of the administrators. The administrators must undertake a reconciliation process in respect of any client funds held by the Company to ensure that each client receives the funds to which he/she is properly entitled out of the client monies held by the Company at the date of administration. This is a very time-consuming process which the administrators are trying to resolve as quickly as possible. No client funds can be returned to clients until the administrators are certain of their entitlement.
3.2 Funds held by Saxo
Any client funds held by Saxo are being held to the order of the administrators. The accounts held by the Company with Saxo are currently being reconciled in respect of each client in order to determine the monies due to (or in some cases from) clients.
Subject to completion of the reconciliations, the full amounts received by the Company from Saxo (subject to any right of set-off in respect of any debt owing to Saxo from the relevant account holder/ client) will be repaid to the relevant account-holder (less any fees that may be properly payable for dealing with the client funds) as quickly as possible, as long as each client account is fully funded.
3.3 Funds held by Man
All funds held by Man have been paid over to the Company. The administrators have written to all known Man investors who have an account balance requesting confirmation that the balance held by the Company at the date of appointment of the administrators is accepted in full and final settlement of any and all claims that they may have against the Company in respect of the return of client monies.
Any Man clients who have not received such notice should contact the administrators immediately.
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4. What is happening to client shareholdings?
All client shareholdings obtained through the Company were registered in the name of Pacific Continental Securities (UK) Nominees Limited ("Nominees"). Nominees is not in administration.
The quality of the records that the administrators have received from the Company in relation to the shareholdings held by Nominees is not sufficient to allow the administrators to identify which clients are entitled to which shareholdings.
The administrators are in negotiations with a former software provider of the Company to try to access further information held in relation to the shareholdings in order to allow the administrators to carry out a full reconciliation of the shareholdings. This is an extremely time-consuming process, however the administrators are dealing with the matter as quickly as possible.
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5. How long will this take to resolve?
As stated above, the administrators are aiming to provide their statement of proposals to creditors by no later than Wednesday 17 October 2007.
By this stage they hope to have been able to progress the reconciliations of client funds and shareholdings and to be in a better position to confirm exactly what further work is needed to complete the administration.
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6. What can I do to help?
Clients who have not already done so should supply any supporting documents they have available to provide evidence of their claim, e.g. statements from the Company, evidence of bank transfers, details of shares held.
As soon as the administrators have further updates to report they will provide these on the Company's website www.pacconsec.com.
If you have further queries please click here to email.
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