LexisNexis Corporate Rescue and Insolvency: Case Alerter – December 2025

At-a-glance case summaries provided by the Gatehouse Chambers’ Insolvency Team, featuring:

• GGF Fund Ltd v Anglian Windows Ltd & E Realisations 2020 Ltd [2025] EWHC 2397 (Ch)
• Pagden v Fry [2025] EWHC 2316 (Ch)

Read the latest CRI Cases Alerter authored by Wendy Parker and Mark O’Grady below

GGF Fund Ltd v Anglian Windows Ltd & E Realisations 2020 Ltd [2025] EWHC 2397 (Ch) This case concerned the closure of a mutual fund: the Glass and Glazing Federation’s Deposit Indemnity Fund (the fund), which was created in 1979 to protect consumer deposits paid in relation to orders placed with glass and glazing companies in the UK and Ireland. The fund was financed by fund member contributions but was ultimately backed by Stop Loss insurance. This was designed to protect against extreme or unpredictable losses that the fund might suffer. Anglian Windows Ltd was one of the fund’s two largest fund members, by way of contributions, having contributed approximately £2.5m since the inception of the fund. Anglian and E Realisations 2020 were named as representative defendants under CPR 19.9(2)(d)(ii). In a judgment handed down on 22 September 2025, Chief Master Shuman considered the construction of the fund’s rules and in particular whether members who became insolvent on certain dates were nonetheless entitled to participate in the distribution of any surplus. Prior to the COVID 19 pandemic, there were concerns that the fund was vulnerable to the financial instability of its larger members, with there being a potential for a shortfall between the fund’s cash reserve and its stop loss cover. Thereafter, the cost of stop loss cover substantially increased, however it would not have been sufficient to cover several large or multiple small failures of existing fund members. At a board meeting on 30 March 2020, the fund’s board resolved to close the fund to new business with effect from 1 April 2020, and to terminate the fund and distribute any excess to fund members, in
accordance with the rules and after valid claims had been paid out (which surplus amounted to c.£4m). Amongst other findings, the court held that only those who were members as of 31 March 2021 – the date of the fund’s termination – were entitled to participate in the distribution of surplus assets. Membership was automatically terminated for any company that entered insolvency before that date, as provided for by the fund rules. The court held that this therefore excluded the second defendant, E Realisations 2020 Limited (known formerly as Everest Limited) from qualifying for any distribution in respect of the fund’s assets, as they had become insolvent prior to 31 March 2021. This case may be of particular interest for those concerned with the nexus of insurance, insolvency, membership rights, and fund administration.

Pagden v Fry [2025] EWHC 2316 (Ch) The High Court determined a preliminary issue as to whether cl 13.2.3 of Begbies Traynor (Central) LLP’s standard terms of business and cl 7 of the letters of engagement dated 5 and 6 March 2015 limited the liability of the Begbies Defendants to an aggregate sum of £1m in respect of the breaches of duty alleged in the particulars of claim. The court held that the former liquidators could not limit their liability because they are fiduciaries holding assets on a statutory trust for statutory purposes and their liability arises under a statutory framework that makes no provision for limitation of liability. The court further held that the other Begbies Defendants may be protected by the limitation provisions if they were involved in providing services within the scope of the letters of engagement including services provided after the appointment of the former
liquidators. The court also held that the limitation provisions are wide enough to cover vicarious liability but whether they are effective to do so may depend on the basis on which vicarious liability is established. The question of whether the limitation clause is rendered invalid by the Unfair Contract Terms Act 1977 was left outstanding.

FACTS

The claimant companies were placed into members voluntary liquidation in 2015 with Mark Robert Fry and Neil John Mather appointed as joint liquidators. The liquidators were partners in Begbies Traynor (Central) LLP. Prior to the liquidation the directors of the claimant companies signed letters of engagement with Begbies Traynor (Central) LLP which incorporated standard terms of business. The letters of engagement and terms purported to limit the liability of Begbies Traynor and Begbies Traynor Persons to £1min respect of loss or damage arising from or in connection with the provision of the services. The claimant companies were restored to the register and new liquidators were appointed. The claimant companies brought claims against the former liquidators and other Begbies Defendants for breaches of fiduciary tortious and contractual duties arising out of the conduct of the liquidation.

The Begbies Defendants argued that their liability was limited by the letters of engagement and terms. A trial of a preliminary issue was ordered to determine whether the limitation clause limited the liability of the Begbies Defendants to £1m aggregate for the alleged breaches. The preliminary issue was determined on the basis of assumed facts and matters agreed for that purpose.

HELD

The court held that it is impossible for liquidators to limit their liability because they are fiduciaries administering a statutory trust and the statutory framework makes no provision for limitation of liability. The court held that this conclusion is not inconsistent with the decision in Re City Equitable Fire Insurance Company because the position of liquidators is distinguishable from that of directors or auditors due to the statutory trust. The court held that the limitation clause does not oust the jurisdiction of the court under s 212 of the Insolvency Act 1986 because that section provides a procedural mechanism to enforce existing liabilities rather than creating new liabilities. The court held that the letters of engagement and terms have effect after the appointment of the liquidators in respect of services provided by Begbies Traynor (Central) LLP and other Begbies Traynor Persons excluding the former liquidators themselves. The court held that on a true construction the services include providing staff to undertake work on the assignment during the course of the liquidation. The court held that the limitation clause applies to limit the liability of the other Begbies Defendants for their own breaches and potentially for vicarious liability subject to the basis on which vicarious liability is established. The court held that BTG Advisory may benefit from the limitation clause if it was assisting Begbies Traynor (Central) LLP in providing services within the scope of the letters of engagement.