Joint special administrators and information about renumeration

Dolfin Financial (UK) Ltd (the Company) was an FCA authorised and regulated wealth management firm. It entered special administration in June 2021.

Notwithstanding that the joint special administrators (JSAs) had provided a SIP9 to all creditors, a creditor (Dolfin Asset Services Limited) applied to the court to compel the JSAs to provide a line-by-line breakdown of post-appointment unpaid WIP, to include the date, narrative (redacted where required), hours, amount, rate, descriptor and grade of fee earner for all WIP, and to identify the objective that work applied to. The JSAs had refused to provide this information on the basis that:

  1. The time and cost of preparation is excessive
  2. Disclosure would be prejudicial to the administration
  3. Some of the information requested is confidential

The court found that it did not have jurisdiction to make the order sought. Here, the JSAs provided information compliant with SIP9 as a matter of good practice. However, as the reference "remuneration" in rule 201 is a reference to rule 122(1)(f) and there was no jurisdiction to make an order under rule 201 of the Rules; as such, the applications were misconceived as the right to further information is not absolute. 

The language of subsection 2 of rule 201 is subjective so that an administrator need only "consider" that one or more of the alternate grounds exist. Here the JSAs had given alternative grounds. There was no suggestion of bad-faith and, in the court’s view, the refusal on this ground falls a long way short of irrational: requiring the JSAs to provide a statement of remuneration (on a line-by-line basis) would be excessive and disproportionate especially where a compliant SIP9 report had been provided and further information about remuneration was imminent. The court also noted the complexity of the administration and overlap that arises between objectives. This overlap was relevant in circumstances where remuneration would be paid from different sources dependent upon the objective.

The application was dismissed.

Dolfin Financial (UK) Ltd, Re
Also known as: Dolfin Asset Services Ltd v Stephens

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