Competing administrators

What happens if, on an application to appoint administrators, there is a dispute over who should be appointed?

This case involved a company providing foreign exchange services. It was common ground that a special administration order should be made, but the directors and creditors disagreed over who the special administrators should be.  

In the directors’ case, supported by the FCA, they proposed two IPs who had some prior involvement in the lead up to the application, whereas a group of creditors proposed two entirely independent alternatives. As a composite group those creditors represented over half in number and almost 90% by value. The Court concluded there were no conflict reasons, or issues around the capability of the four proposed administrators, leaving it with the task of determining how to break the tie. 

The fact the FCA supported one group over another in a special administration carried little weight here. Instead, what weighed most in the judge’s mind were the comments of Patten J in Oracle (Northwest) v Pinnacle Service (UK) Limited in which it was said where there was a choice, it was “one essentially dictated by the wishes of creditors, for whose benefit in the end the administration is”. Accordingly in the absence of some other bar, the creditors’ proposed administrators were appointed.  

The judgment also referenced that the possibility of a joint appointment across two firms had been canvassed. That solution was dispensed with as Deputy ICCJ Baiser observed there were disagreements over what specific roles each would have, which indicated that sort of arrangement could create more problems than it solved.

Eisenberg v Jnfx Limited [2025] EWHC 3090