The special administrators of MFGUK have come up with a CVA proposal for its remaining ordinary creditors, which will enable the winding-up of the estate to the benefit of the creditors.
The administrators have made a number of material settlements and realisations during the administration, simplifying the estate and permitting distributions to ordinary unsecured creditors of 90p in the pound.
However, due to complex issues relating to certain key remaining assets and liabilities, they do not expect to be able to make any material further distributions for another 2 years (at least) and they expect it will take 8-9 years to finalise the winding-up of the estate and make a final distribution.
If the CVA is approved, it will give creditors the option to exit the administration early in exchange for a payment that brings their total return to 99.75p in the pound. Creditors can also choose to remain in the estate in the medium term, or participate in the funding of the exit payments and remain in the estate long-term, in exchange for a beneficial interest in the upside on the claims of the exiting creditors and medium-term creditors.
MFGUK currently have around 3,500 creditors but the CVA is anticipated to significantly reduce this number. The anticipated implementation date of the CVA is 15 January 2018.