Mazars, joint administrators for Pritchard Stockbrokers, have begun paying out the first interim distribution of 50p in the pound to clients.
The payment follows an initial freezing of Pritchard's bank accounts in February by the Financial Services Authority due to failings concerning client monies.
The firm says approximately 3,300 claims have been agreed to date with claims for cash totalling approximately £13.7m. The first tranche of the interim distribution payments were issued on 31 July.
Mazars reports that it has identified over £26.5m in over 11,300 client accounts at the stockbrokers. The firm say it has carried out extensive work on these pooled client monies, 'with considerable difficulty being encountered in the reconciliation process'. Current estimates suggest there may be a shortfall of approximately £2.8m.
The administrators have been in touch with the Financial Services Compensation Scheme (FSCS) regarding possible compensation over any shortfalls.
Mazars says it has also dealt with 'Post Pooled Monies', mainly in respect of dividends and interest received after 10 February when Pritchard's bank accounts were frozen. Payments totalling £1.4m have already been made to approximately 2,800 clients, with a further £400,000 due to be paid to clients in the near future, once reconciled.
Pritchard's is only the second example of an administration handled under the Special Administration Regime (SAR) which was introduced in February 2011, following the demise of Lehman Brothers in 2008, to prioritise the recovery of identifiable client monies and assets.
Tim Ball, the lead joint special administrator, said: 'To have worked towards getting to a position in Pritchard whereby the bulk of the clients have now had their stock successfully transferred to the new stockbroker; and the joint special administrators paying out such a large first interim dividend to clients as regards their cash claims, within five months of the appointment, is testament to the skill and commitment of all involved in what is only the second such example of this new procedure.'
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