Administrators for the collapsed mortgage provider Market Financial Solutions (MFS) are suing Barclays, alleging the bank has refused to grant them access to MFS's frozen bank accounts. The lawsuit, filed in London, seeks a court order to access funds that could repay creditors.

MFS collapsed earlier this year amid fraud allegations, with its accounts at Barclays frozen. At the time of collapse, Barclays held approximately £160mn in accounts linked to MFS entities. Creditors, including Jefferies and Atlas SP Partners, lent over £2bn to MFS-related entities.

Barclays, which also served as MFS's corporate bank, blocked its services after discovering alleged irregularities. Creditors face an estimated £1.3bn shortfall, with about £250mn unaccounted for, linked to alleged misappropriation by MFS owner Paresh Raja. Barclays stated it is defending the claim.