Background
Float Capital Limited, an unregulated corporate lender, entered administration in May 2024 and moved into creditors’ voluntary liquidation on 23 August 2024. Its principal asset was a portfolio of 22 loans with a face value of approximately £12.09 million, although much of the associated security proved invalid or unenforceable. Geoffrey Bouchier and Ben Woodthorpe became joint liquidators.
The liquidators applied for court approval of their remuneration because Philips Trust Corporation Limited, itself in administration, held approximately 98% by value of Float Capital’s unsecured claims. Bouchier was also one of PTC’s joint administrators, making it inappropriate for PTC to determine remuneration payable to his firm or his co-liquidator. Bouchier sought a time-cost basis capped by a £362,986.50 estimate, while Woodthorpe sought approval of a £1,272,872 liquidation estimate. Woodthorpe’s remuneration as administrator had previously been approved on a time-cost basis with a £229,250 estimate.
The Court’s Holding
The High Court fixed Bouchier’s remuneration under rule 18.23 of the Insolvency (England and Wales) Rules 2016 on a time-cost basis, with £362,986.50 operating as the fees estimate and cap for rule 18.30 purposes. Although Bouchier had not first attempted a creditor decision as rule 18.23(2) ordinarily requires, the court held that the creditor route was genuinely unavailable because PTC’s controlling vote was affected by the conflict. His application, issued on the final day of the 18-month period, was timely.
For Woodthorpe, the court refused relief under rule 18.23 because the time-cost basis fixed during the administration carried into the liquidation under rule 18.20(4) and (5). It nevertheless held that rules 18.24 and 18.28 permitted the court to increase the amount fixed by reference to a new fees estimate, even though the underlying time-cost basis remained unchanged. The court therefore approved a £1,272,872 liquidation estimate. The separate £229,250 administration estimate remained in place, and the £16,951.50 administration overrun was written off.
The estimates were ceilings rather than entitlements to payment. The court required continuing SIP 9 reporting, notice of the judgment and order to specified creditors and PTC’s non-conflicted joint administrator, liberty to seek variation or discharge, and further court approval before either liquidator could draw more than the approved estimate. The application costs were allowed as an expense of the liquidation.
Key Takeaways
- A liquidator need not pursue a creditor decision that could succeed only through a conflicted controlling creditor, although canvassing minority creditors or seeking early directions is better practice.
- When an administrator becomes liquidator, the remuneration basis fixed in the administration carries over under rule 18.20, even if the original fees estimate covered only the administration.
- The court may use rules 18.24 and 18.28 to increase the remuneration amount by approving a new time-cost estimate without changing the carried-over basis; approved estimates remain caps, not targets.
Why It Matters
The judgment addresses a previously undecided interaction among the remuneration provisions governing administrations converted into liquidations. It confirms a judicial route for approving an increased time-cost estimate when the remuneration basis has carried over but the creditor approval mechanism is disabled by conflict.
It also underscores the court’s heightened scrutiny where creditors cannot provide an effective economic check. Approval of an overall estimate does not validate every recorded time entry: office-holders may draw only remuneration reflecting work properly performed and remain subject to reporting and creditor challenge.