Feb 28, 2026
3 min read
(Bloomberg) -- Barclays Plc and Atlas SP Partners are among the Wall Street firms that helped structure more than 2.7 billion pounds) of loans to a British mortgage financier that collapsed amid alleged financial irregularities.
(Bloomberg) -- Barclays Plc and Atlas SP Partners are among the Wall Street firms that helped bail out a $US2 billion ($2.7 billion) loan to a British mortgage lender that collapsed amid allegations of financial defaults.
Market Financial Solutions Ltd. (MFS) filed bankruptcy proceedings in the U.K. on Wednesday after a judge accused it of fraud and double-encumbering its assets. Barclays and Atlas, the structured credit units of Apollo Global Management Inc., each lent hundreds of millions of dollars, and Banco Santander SA and Castlelake LP are also among the lenders, according to people familiar with the matter.
The collapse of financial services firms could directly fuel concerns about lax underwriting standards in credit markets.Last year, the bankruptcies of US auto parts supplier First Brands Group and subprime lender Tricolor Holdings rocked Wall Street.JPMorgan Chase & Co CEO Jamie Dimon said on Monday that some of his rivals were doing "stupid things" to improve performance, recalling the years before the 2008 financial crisis.
Representatives for Barclays and Santander declined to comment.A spokeswoman for Atlas confirmed its role as a major creditor and said the company was "looking at all legal options to maximize recovery" from the £400m loss.
Barclays also manages MFS's bank account, the people said.The London-based bank froze those accounts in recent weeks, they said.
Paresh Raja, founder and owner of MFS, did not respond to a request for comment through his LinkedIn profile.A spokesman for AlixPartners, the firm overseeing the administration, also declined to comment.
MFS, which has an office in London's Mayfair district and employs more than 100 people, offered customers "complex asset-backed financing," including short-term loans known as loans, according to a statement on its website dated March 31, 2025.According to that statement, the firm had built a loan book of 2.5 billion pounds.
To finance this business, MFS borrowed from Wall Street lenders through a group of subsidiaries.MFS acted as a servant to this group collecting mortgage loans.
Two companies in the group, Zircon Bridging Ltd. and Amber Bridging Ltd., filed this week for MFS to be put into administration, making various allegations of mismanagement, according to a court document in the proceedings.Those companies, which also went into administration, together provided almost £1bn in bridging loans by the end of 2024, according to their annual financial reports.
"There is evidence of non-compliance," the Zircon and Amber court said.His top priority is to get MFS "under the control of independent trustees as soon as possible".
According to the complaint, Zircon and Amber allege that MFS failed to "deposit the mortgage proceeds into the correct bank account."They also claim there is a "significant deficiency" in their warranty.
"Deficits in collections that should have been deposited into the respective accounts could reach" £238 million for the two companies, they claimed.
Private lender Castlelake structured an outstanding financing facility for MFS with a balance of around £400 million, one of the sources said. He added that Caslake retained part of the loan while the rest was transferred to other lenders.
The Minneapolis-based firm is "fully involved" in the subprime mortgage portfolio managed by MFS, a spokeswoman said in an emailed statement."We have no direct material exposure to MFS."
A group of "prominent international institutional investors" backed MFS, according to its March 2025 statement. According to its 2024 accounts, the company secured £1.3 billion of "new institutional funding to increase loan demand", adding £1.1 billion to existing funding facilities.
A Bloomberg investigation in 2024 found that a group of companies linked to Raja, including MFS and Zircon, lent money to dozens of real estate deals linked to Saifuzzaman Chowdhury, Bangladesh's former land minister.Chowdhury had amassed a property portfolio of more than 350 properties worth around £200m, Bloomberg reported at the time.
Nota Original: Barclays, Atlas among companies exposed to failed UK financial institution MFS
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--In collaboration with Luca Kaziragi and Jonathan Browning.
