The administrators of collapsed mortgage lender Market Financial Solutions (MFS) are taking legal action against Barclays, alleging the bank has refused to return millions of pounds held in its accounts. Alix Partners, appointed as joint administrators for MFS in February, filed a High Court claim against Barclays on 31 July.
The claimant alleges that Barclays has not returned cash owed to the administrators of MFS Ltd, which is the lender’s central operating entity. Barclays was reportedly holding in excess of £160m belonging to MFS's operating unit and funding silos when the administration began.
Barclays has confirmed it will defend the claim. The bank had a dual role in the MFS ecosystem, acting as both a lender and providing primary transactional bank activities. It began freezing MFS accounts in January 2026 after identifying irregularities.
Barclays' total exposure to MFS is estimated at around £500m, making it the largest single creditor. The bank incurred a £228m hit from the collapse, contributing to its total credit impairment charges of £823m for the first three months of the year.