Creditors Face £1.8 Billion in Claims Amid MFS Group Fallout, Documents Reveal

Paresh Raja, the founder of collapsed mortgage firm Market Financial Solutions Ltd., is facing a £1.3 billion ($1.8 billion) lawsuit in the UK from creditors alleging he breached his fiduciary duties, according to court filings seen by Bloomberg News.

The claim, brought by officials overseeing the wind-down of MFS, seeks recovery of funds they say are currently unaccounted for in the insolvency proceedings. Administrators of the insolvency said they are at the “starting point” of broader litigation as they work to recover assets, according to documents reviewed by Bloomberg.

Initial estimates show creditors have £1.8 billion of claims against the collapsed firm, according to the same documents. MFS was at the center of a sprawling group of companies that borrowed from backers including Barclays Plc, Jefferies Financial Group Inc. And Apollo Global Management Inc.’s Atlas SP Partners.

The London-based firm used the borrowed funds to finance short-term real estate loans and collapsed in February 2026 amid allegations of wrongdoing and fraud. A spokesperson for Raja declined to comment on the litigation.

The saga has drawn attention from Wall Street executives due to its similarities to other recent credit market blowups, including US auto lender Tricolor Holdings and auto parts supplier First Brands Group.

Officials at insolvency firm AlixPartners are overseeing the administration. They were appointed by Zircon Bridging Ltd. And Amber Bridging Ltd., two entities within the MFS group that were backed by Wall Street firms and lent more than £1 billion combined, according to claims made in the proceedings. Both Zircon and Amber are also in administration, a UK form of insolvency.

Multiple similar entities within the MFS group have collapsed and are undergoing separate insolvency processes.