The High Court handed down judgment today in favour of the Administrators of MF Global UK Limited in the repos to maturity (RTM) Application. The judgment decides an important issue relating to the termination of the multi-billion dollar repos to maturity that MF Global UK had entered into with its US affiliate MF Global Inc. in 2010 and 2011.
The Court held that MF Global UK is the “non-Defaulting Party” under the Global Master Repurchase Agreement (GMRA) between the two companies. This means that it is MF Global UK that is entitled to calculate the close out amount on the repos to maturity. The significance of this can be seen from the fact that MF Global Inc. had asserted that the close out amount payable to it was more than £286 million, whereas the Administrators consider that the correct sum is something in the region of £37 million.
Mark Lawford in Weil’s Business Finance & Restructuring team in London commented that, “As well as being a great result for the Administrators and for MF Global UK’s creditors and clients, this judgment is of wider significance in terms of the interpretation of the industry standard GMRA document.”
Jamie Maples, partner in the Dispute Resolution practice in London, added, “It is noteworthy that the judge considered the nature of the new ‘special administration’ regime and determined it was not analogous to liquidation for the purposes of construing the GMRA.”
The Administrators were represented in Court by Antony Zacaroli QC and Daniel Bayfield of 3/4 South Square, instructed by Jamie Maples, Mark Lawford and Catherine Gurney of Weil.
The judgment follows the historic landmark Court approval in July this year of the first distribution plan for the return of client assets under the special administration regime. Weil is fielding a multi-disciplinary team, led by head of London restructuring practice Adam Plainer, as part of its representation of the Administrators of MF Global UK, which is the largest European collapse since Lehman.
This news appeared in the following outlets (may require registration/subscription):

• Law360: MF Global Trustee Dealt Blow in UK Repo Fight (November 1, 2012)