Ford puts KPMG on notice for legal action over Lifemark

Keydata founder Stewart Ford has issued a formal notice that he will sue KPMG's Eric Collard, the administrator of the Lifemark portfolio, if Collard fails to secure a $150m loan facility offer to save Lifemark.

Law firm Withers have written to Collard on behalf of Ford accusing the Lifemark administrator of refusing the offer brokered by Ford due to his "continued hostility" to the Keydata founder.

The letter gives formal notice of Ford's intention to sue Collard and KPMG if they continue with "delay, obfuscation and a complete lack of urgency".

It states: "The purpose of this letter is therefore to record our clients' dissatisfaction with your performance as provisional administrator and formally to put you on notice that, should you continue to fail to discharge your mandated duties in relation to the implementation of the New Facility, our clients will hold you and KPMG Advisory S.A.R.L fully responsible for any loss or damage that may be caused by your actions or continued failure to act."

The letter continues: "Our clients and other interested parties with whom we have been working in relation to Lifemark consider that your role as provisional administrator has been nothing short of disastrous to date for Lifemark and its stakeholders."

Ford brokered a deal on 11 August with an unnamed US investment bank to offer the loan facility to the illiquid portfolio of traded life settlements at an interest rate of about 6%, half the rate offered by previous potential lender, US hedge fund Carval.

According to Ford, the new facility would enable Lifemark to bring its policy premium payments up to date and meet other outstanding financial obligations, including repayment of £244m to the Financial Services Compensation Scheme, which he said could then repay levypayers.

The loan would also allow the Lifemark portolio time to perform as originally intended, according to Ford.

But Collard, who announced last week he would be stepping down as adminstrator of Lifemark at an as yet unknown future date, has not accepted the offer of the loan facility.

According to the letter from Withers, Collard initially agreed to the offer, but then u-turned, saying the $150m loan facility would only be acceptable to bondholders if it included a guaranteed, non-negotiable upfront payment of not less than $100m cash.

The US investment bank involved in the deal has declined to proceed on these terms.

A copy of the letter has also been sent to the Financial Secretary to the Treasury Mark Hoban, AIFA, the IMA, the FSA, the FSCS, chairman of the Treasury Select Committee Andrew Tyrir, and the Luxembourg regulator the CSSF.