Key facts
- Paresh Raja, founder of collapsed UK property company MFS, accuses administrators of "internecine warfare" in ongoing legal battles.
- Creditors are pursuing approximately £2.3 billion (US$3 billion) in loans extended to MFS.
- Some entities, including London Bridging Ltd, allege Raja misappropriated over £200 million.
- Raja's lawyers claim the multiple lawsuits are uncoordinated and harassing.
- MFS entities Amber Bridging Ltd and Zircon Bridging Ltd are preparing to issue claims against Raja for over £1 billion.
- Administrators for MFSI have issued statutory demands for £278 million against Raja.
Paresh Raja, the founder of the collapsed UK property company Market Financial Solutions (MFS), has accused administrators of engaging in "internecine warfare" through a barrage of lawsuits as creditors attempt to recover approximately £2.3 billion (US$3 billion) in loans.
Raja's lawyers stated in a UK High Court filing that the various entities pursuing claims are not coordinating their efforts, leading to "urgent" applications and harassment across different legal forums. Some creditors have accused Raja of looting the company of hundreds of millions of pounds and using loan proceeds for personal expenses.
Creditors including Barclays plc and Apollo Global Management Inc's Atlas SP Partners unit backed the MFS group. Many of these entities are now in administration, a form of insolvency in the UK, and are pursuing litigation to recover funds.
Specifically, London Bridging Ltd (LBL), backed by loans from Barclays and Castlelake LP, has alleged that Raja "misappropriated" more than £200 million. Raja has sought to suspend LBL's case pending resolution of other litigation, while LBL accuses him of attempting to "delay and/or avoid facing" its claims.
Two other MFS entities, Amber Bridging Ltd and Zircon Bridging Ltd, which borrowed over £1 billion, are expected to issue claims against Raja shortly. Early estimates suggest these entities may recover only nine to 13 pence on the pound for creditors, including Apollo's Atlas unit.
Administrators for Market Financial Solutions International Ltd (MFSI) have served statutory demands on Raja for £278 million, while Interlend Holdings Ltd has demanded immediate payment of £28 million. A spokesperson for AlixPartners, which is managing the administration of MFS, Amber, and Zircon, declined to comment.