A London judge has ordered UK commodity trader Midwest Commodities be placed in administration after it failed to honour a guarantee it provided over the debts of a sister company.<\/p>\n
Midwest Commodities provided a guarantee for a loan extended by FCMB UK to Midwest Polychem, which operated a plastics recycling centre in the English county of Lincolnshire.<\/p>\n
The court heard that in March 2025 Midwest Polychem stopped servicing the loan and owes some \u00a35.4mn, including interest and legal fees, to FCMB, a London-based subsidiary of the Nigerian bank.<\/p>\n
In December the lender demanded that Midwest Commodities immediately honour the guarantee and pay its sister company\u2019s outstanding principal of around \u00a35.1mn, but the firm failed to do so.<\/p>\n
Midwest Polychem was placed into administration in January this year. Its recycling centre stopped operating last August, according to an administrators\u2019 report.<\/p>\n
At an April 2 hearing, Justice Catherine Burton dismissed Midwest Commodities\u2019 arguments that the decision be adjourned to give time for further legal submissions on the wording of the facility, and because the firm had \u00a38mn in assets and may be able to pay the guarantee.<\/p>\n
She said the wording of the facility agreement was \u201cuncontroversial\u201d and the company had not provided any sworn evidence about its assets.<\/p>\n
\u201cI am satisfied that the company is insolvent, is unable to pay its debts as and when they fall due on a cash flow basis,\u201d the judge said.<\/p>\n
FCMB argued creditors are likely to see a better outcome if the company was put in the hands of administrators FRP Advisory, rather than liquidators. FRP is already administrator for Midwest Polychem.<\/p>\n
In its most recently published accounts, for the 2024 calendar year, Midwest Commodities reported turnover of \u00a355.4mn and post-tax profit of \u00a3434,928.<\/p>\n
In her judgment, Justice Burton also cited evidence from one of the proposed administrators that several transactions between the Midwest companies have created a deficit of \u00a3477,007 and administrators have so far been \u201cunable to identify the rationale\u201d for the payments.<\/p>\n
In a March report, administrators of Midwest Polychem said their enquiries \u201chave been hampered due to a lack of co-operation from the directors and management\u201d but added that \u201cinformation has now been received\u201d.<\/p>\n
FCMB was likely to be able to secure a return only through its fixed charge security, the administrators said.<\/p>\n
Midwest Commodities has been approached for comment through its barrister. FCMB declined to comment.<\/p>\n","protected":false},"excerpt":{"rendered":"A London judge has ordered UK commodity trader Midwest Commodities be placed in administration after it failed to…\n","protected":false},"author":2,"featured_media":8469,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[4],"tags":[4245,4246,4247,4248,5,6],"class_list":["post-8468","post","type-post","status-publish","format-standard","has-post-thumbnail","category-uk","tag-fcmb-bank-uk","tag-litigation","tag-midwest-commodities","tag-midwest-polychem","tag-uk","tag-united-kingdom"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116363844786758618","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/8468","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=8468"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/8468\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/8469"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=8468"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=8468"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=8468"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}