Merchant House Group has collapsed into administration following the insolvency of its subsidiary businesses Merchant Capital and Merchant House Financial Services.
The group entered administration following a petition from solicitors CMS Cameron McKenna and Reyker Securities in March.
The financial intermediary arm of the group – Merchant House Financial Services – entered administration in March with Leonard Curtis appointed to handle the case.
Reyker Securities has since issued a statement saying that Merchant had originally been obligated to pay for the ongoing custody and administration costs relating to structured product plans that it managed. In the event of Merchant defaulting, its parent company, the formerly AIM listed Merchant House Group had guaranteed to pay these liabilities.
However, because the group had not honoured this guarantee some weeks ago Reyker Securities instigated winding up proceedings against MHG.
The statement added: “This was advertised publicly in the London Gazette as is required by law and the proceedings were scheduled for a hearing in the High Court today, 15 April 2013. Reyker’s solicitors were notified late in the afternoon on Friday 12 April 2013 that the directors of MHG have placed it into administration. “
Alex Cadwallader, Michael Healy and Andrew Duncan were appointed joint administrators to the financial advisory division of Merchant House on 21 March 2013.
Aspire Financial Management Limited, a subsidiary of the Tenet Group then purchased this subsidiary with 13 jobs transferred in the process.
In November, the embattled Merchant House Group was unable to raise sufficient funding to restore trading on the Alternative Investment Market (AIM) and its admission to the junior market was cancelled.
Merchant House Financial Services has struggled financially since the acquisition of the business of Wisbech-based competitor Clarkson Hill Group in 2010.