Its for bitcoin core though. From this [1] part they look legit as they would not exactly have your private keys. Not sure how they would enforce the 20% then, but its a common way to make sure you can trust them with your wallet. Not sure if its possible with multibit, but for such an amount Id contact them.

Edit: Since Multibit keeps every private key seperated it is actually very easy to give the service a key that has no funds on it, but still requires the password.


[1] http://www.walletrecoveryservices.com/information.html