The court was asked to assist the joint liquidators of Float Capital[1] (the Company) in circumstances where it was inappropriate to seek creditor approval under Part 18 of the Rules. This was because the majority creditor of the Company, PTC, was in administration and, Mr Bouchier, one of the liquidators of the Company was also one of the joint administrators of PTC. The court agreed that in those circumstances, it was correct for the liquidators to apply to court.
The company had previously been in administration and later moved to creditors’ voluntary liquidation. During the administration, the administrators (Mr Woodthorpe and Mr Supperstone) sought and obtained approval from creditors for fees to be paid on a time-cost basis. The fees estimate, which underpinned this fee basis was deliberately confined to administration costs only, because it had been agreed that Mr Bouchier would become liquidator of the company in due course. Therefore, he should have no involvement in agreeing fees beyond the administration.
When the Company moved from administration to liquidation, Mr Woodthorpe then became liquidator, along with Mr Bouchier. The liquidators sought assistance from the court to deal with fees given the concern about conflict because of Mr Bouchier’s role as joint administrator of PTC.
As both issues arose out of the same liquidation and the same creditor approval difficulties, the liquidators sought the court’s assistance in relation to both applications at the same time. Whilst this approach did delay the issuing of Mr Bouchier’s application, it was still issued within the 18-month time limit. Moreover, synchronisation of the applications in this way, avoided the need for multiple applications with likely different hearing dates and the additional costs burden which would have been incurred by the estate.
The court decided it was appropriate to fix Mr Bouchier’s administration under Rule 18.23(1). He had not previously been administrator of the Company and therefore, the basis of remuneration fixed in the administration, did not carry over to Mr Bouchier under 18.20 (4) and (5). Although Rule 18.23(1) requires the officeholder to seek approval from creditors before turning to the court, it was not appropriate here because of the conflict. The court therefore fixed his remuneration on a time cost basis, applying the factors in Rule 18.16(9) and the approach taken in Poxon v Wejo Ltd (in administration) [2025] EWHC 135 (Ch).
The position in respect of Mr Woodthorpe was different. His fees had been fixed in the administration on a time costs basis, and by operation of Rule 18.20(4) and (5) that same basis carried across into the liquidation. His application was therefore one that sought to increase the fee estimate originally given, so that he had the ability to draw fees in excess of that estimate. Mr Woodthorpe had not drawn any fees in the administration or liquidation at all and whilst recoveries at the time of issue were relatively modest compared to the total due from the Company’s creditors, the liquidation was expected to run for around another 30 months to enable further, substantial realisations to be made. In respect of Mr Woodthrope’s application, Rules 18.24 and 18.28 did not permit the court to increase a fee estimate where remuneration is on a time-cost basis, the court holding that the proper route is Rule 18.30.
However, that route was not available here because of the conflict and because the other (non-PTC) creditors (who only amounted to approximately 2% of the total value of creditors) were not engaging in the administration process.
The significance of those facts was that the statutory approval process was incapable of producing a meaningful determination. The majority creditor could not properly participate and the minority creditors had consistently demonstrated an unwillingness to engage.
In these circumstances, the court concluded that there was no realistic prospect of obtaining an effective determination through the statutory creditor approval process and as such, the court could deal with the increase under Section 112 IA 1986.
The decision is helpful in confirming that:
- Fees fixed in administration will only carry over to a subsequent liquidation under Rule 18.20(4) and (5) where the officeholder is the same.
- Officeholders seeking to increase a fee estimate cannot do so under Rule 18.24 or 18.28. They must follow the procedure in Rule 18.30.
- In all cases officeholders should attempt to obtain creditor approval (whether under Rule 18.23 or Rule 18.30) before asking the court for assistance.
Key takeaways
The court can assist officeholders under its inherent jurisdiction, but they must follow and exhaust the process under Part 18 before turning to the court.
Although it can be challenging to obtain fee approval where Part 18 does not quite align with the specifics of a particular matter, or creditors won’t engage, have been paid or a creditors committee has been disbanded, IPs should not ask the court to deal with remuneration just because it is more convenient to do so. IPs must demonstrate why the court should invoke its inherent supervisory powers when there is already in place, detailed machinery under the Rules for dealing with remuneration.
In this case, the court was satisfied that seeking creditor approval to a fee increase using a decision procedure was futile because those creditors that could engage (i.e the 2%) had shown complete passivity. In other cases, it would be sensible for officeholders to seek creditor approval before asking the court to step in. For a decision to be made using a decision procedure, there is no de minimis requirement. Therefore, if only a small number of creditors approve, the decision is still made. If they don’t engage and therefore there is no affirmative decision (the deemed consent procedure not being available in remuneration decisions), the IP can at least demonstrate that they have exhausted every possible route under Part 18 and is only then looking to the court for assistance under Section 112 IA 1986. In such a case, and others where it is not sensibly possible to use Part 18, this case confirms the court has jurisdiction to assist and will do so if appropriate.
[1] Re Float Capital Ltd [2026] EWHC 1891 (Ch) 24 July 2006 and [2026] EWHC 2077 (Ch) 5 August 2026. Note the second judgment changes the basis on which the court deals with Mr Woodthorpe’s fees.
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