KPMG UK, special administrator to MF Group, is
planning to take MF Global UK to court to settle a dispute over
some $700m claimed by the US arm of the company.

KPMG said the two counterparts are at
loggerheads on whether the amounts posted in the financial
statement should be treated as segregated or non-segregated
balances, which would determine how to treat the $700m.

Special administrator KPMG added it continues
to pursue the recovery of approximately $400m of MF Global UK
segregated client assets, monies, property assets held.

In its update to clients KPMG also said nearly
80% of the bankrupt financial derivatives
broker-dealer clients’ statements have now been issued and
there are more statements than claims.

The administrators also stressed a Supreme
Court judgment on Lehman Brothers is likely to have an impact on
the dividend payments to creditors of MF Group as the ruling stated
the creditor pot at MF Global UK will need to be shared between the
creditors that should have had their funds segregated.
KPMG partners were appointed administrators of MF Group in the
first use of the Special Administration Regime, at the end of 2011.

The Special Administration Regime was set up
in the wake of the Lehman Brothers collapse and is different to
other corporate administrations because it requires administrators
to focus on a swift return of client assets and the timely
engagement with authorities. This is in addition to normal
administrator functions that companies should be rescued or wound
up in the best interests of the creditors.

The collapse of MF Global UK operations led to
the loss of more than 700 jobs in the companies London office.