Partner Neil Dooley examines the role of freezing orders in cross-border disputes, in The Banker

Writing in The Banker, Partner Neil Dooley analyses the worldwide freezing order obtained against the founder of Market Financial Solutions following the company’s collapse, and considers what this signals about increasing litigation risk in the private credit market.

Neil’s article was published in The Banker, 20 March 2026.

The recent collapse of Market Financial Solutions (MFS), and the subsequent £1.3 billion freezing order granted against its owner, highlights how dislocation in private credit is increasingly giving rise to complex, cross-border litigation.

As has been widely reported, earlier this week the administrators of MFS obtained a worldwide freezing order against Paresh Raja, the founder and major shareholder of MFS. It has also been reported that Mr Raja left the UK for Dubai around the time of the collapse. The timing may raise eyebrows, although any connection will no doubt be denied.

The administrators allege that MFS was effectively operating a Ponzi scheme, raising funds from banks for the business against assets that were already charged to creditors, and leaving an apparent black hole of approximately £1.3 billion. Faced with what appears to be a substantial fraud and limited recoverable assets within the company itself, the administrators have aimed their fire against Mr Raja personally. They contend that he was knowingly involved in the alleged wrongdoing and/or misappropriated company assets.

This is not an isolated dynamic and, as private credit markets expand, similar patterns are emerging with greater frequency.

The English Courts have seen a number of cases in recent years where a once successful asset-finance business encounters financial distress and then seeks to hide the true financial position from its auditors and creditors. Examples such as Arrows, CCH and Greensill illustrate this pattern.

Businesses operating in asset and trade finance are particularly exposed, because their loan books tend not to be of the highest quality. MFS’ most recent financial statement contained all of the usual rubric about good practice (“a trusted, stable and future-ready lender”) and strong compliance (“setting the benchmark for best practice across the specialist financial sector”) , but it seems now that was likely a work of fiction. It is difficult to reconcile with the allegations of fraud now being advanced.

A freezing order is often referred to by judges as a “nuclear weapon”. It is an exceptional remedy, granted by Courts ex parte without notice to the defendant. To obtain such relief, the administrators would have been required to demonstrate to the Court that they have a good arguable case against the alleged wrongdoer (i.e that Mr Raja was a party to the fraud), that there is a serious risk of asset dissipation, and that urgent intervention is justified. They are also under a strict duty of full and frank disclosure meaning that all relevant matters, including those adverse to their case, must be put before the court. In addition, they must provide a cross undertaking in damages in case the order is later found to have been wrongly granted.

The use of such orders in this context is instructive. Where opacity and structural complexity limit early visibility of risk, legal intervention increasingly acts as a backstop, enabling stakeholders to move quickly to preserve value and prevent further loss.

Once armed with a freezing order, the administrators will serve that on those banks and other financial entities with whom they believe may hold assets connected to Mr Raja. Mr Raja will be required, within a short timeframe, to disclose details of his worldwide assets. Failure to comply carries serious consequences, including the risk of committal proceedings and possibly prison.

However, chasing alleged fraudsters is rarely straightforward. Assets may be located in jurisdictions where enforcement is difficult, held through layered corporate structures, or placed in the names of associates. The granting of a freezing order is therefore only the beginning of what is likely to be a lengthy and complex cross-border battle.

Mr Raja may take the view that if he is no longer in the jurisdiction he can play fast and loose with court orders. That is a risky assumption, and he will have limited options. An application to set aside the freezing order seems a long shot given the gravity of the allegations, so he may want to keep his powder dry. A swift return to the UK does not appear likely.

Cases such as the collapse of MFS point to a broader shift in how risk manifests in private credit. As the market expands, litigation risk is becoming more embedded rather than exceptional, with courts and injunctions playing an increasingly central role in determining outcomes at an early stage.

Neil also commented on this news in Financial Reporter, 20 March 2026.