Lifemark teeters on brink of judicial liquidation

The FSCS is unlikely to recoup compensation costs from Keydata-backer Lifemark after it moved a step closer to administration, with its provisional adminstrator declaring it is unable to restructure it.

KPMG Luxembourg said an orderly run-off of Lifemark's portfolio under the supervision of a court appointed liquidator was now considered to be the "only realistic alternative".

As a result, Luxembourg's Commission de Surveillance du Secteur Financier has put Lifemark on notice of its intention to withdraw Lifemark's license as a regulated securitisation.

A number of attempts had been made to rescue the portfolio, including a $150m rescue bid from a US investment bank, brokered by Keydata founder Stewart Ford, and a controlled liquidation of the fund, using a $10m loan from the FSCS.

However, a judicial liquidation will leave the FSCS with one less route to recoup the costs it incurred in compensating Keydata investors as other creditors may rank ahead of them and the proceeds of sale are expected to be significantly worse than in a controlled liquidation.

It recently began pursuing advisers who recommended Keydata products backed by SLS to and is also expected to go after firms who recommended clients invest in the Lifemark-backed products.