KPMG to hold FSCS crunch talks over Lifemark loan

Firm’s administrator to negotiate emergency loan for stricken Keydata business to prevent portfolio from insolvency.

KPMG’s Eric Collard will this morning (June 27) arrive in London to hold crunch talks with the Financial Services Compensation Scheme (FSCS), over an emergency loan for stricken Keydata firm Lifemark.

Luxembourg-based Mr Collard is to discuss the terms of a proposed $10m (£6.3m) stopgap solution to keep Lifemark’s portfolios of traded life settlements from collapsing into insolvency.

The Lifemark administrator is expected to offer a series of concessions to the FSCS in order to secure the emergency loan, which is required as the portfolio could collapse as early as end August if no funding is secured.

The package is smaller than the $30m that KPMG is understood to believe would allow the Lifemark portfolio to become self-funding.

If Lifemark collapses, IFAs and fund managers will never be paid back the giant interim levies they were charged by the FSCS earlier this year totalling £326m - most of which covered the cost of compensating Lifemark investors.

The stopgap loan is likely to be financed in part from the £28m clawed back by the FSCS from Norwich & Peterborough Building Society, one of the biggest sellers of Keydata products, it is understood.
Last month, Investment Adviser revealed that the FSCS had taken the lead in the negotiations with KPMG, with former leader the IMA taking a back-seat role.

Investment Adviser has also learned that KPMG’s legal battle with Billericay Trading Limited, Keydata founder Stewart Ford’s family trust, over a $17.2m subordinated loan has been delayed until the beginning of next month.

Lawyers for Billericay are focusing on gathering more evidence before a hearing in Luxembourg. A court case is expected in September.

The Billericay trust, of which Mr Ford is a beneficiary, claimed in May that KPMG had breached the terms of a loan agreement and demanded immediate payment in line with other Lifemark creditors, including the FSCS.

Mr Collard last week declined to comment.