E&Y is on standby as receiver to Sigma, but firesale unlikely
Accountancy Age, 03 Oct 2008
Ernst & Young is on standby to act as receiver to Sigma Finance, the collapsed $27bn structured investment vehicle run by Gordian Knot Ltd, although it is unclear when the appointment could be made, Financial Times reports.
Sigma ceased trading Wednesday after JPMorgan declared a default on its funding line. The cost of the collapse was revealed when Zurich Financial Services announced yesterday a write-down of $275m resulting from its default.
Although the collapse debt vehicle is unlikely to trigger a fire-sale of assets, creditors of the structured investment vehicle face heavy losses, analysts told Reuters.
‘Both Gordian and Sigma are taking all necessary steps to ensure that the interests of all creditors of Sigma are safeguarded, a Sigma statement said. ‘Sigma will not be making any payments to counterparties during this period.’
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