LexisNexis Corporate Rescue and Insolvency: Case Alerter – February 2026

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

• Pagden v Ridgley [2025] EWHC 2674 (Ch)
• Mitchell v Sheikh Mohamed Bin Issa Al Jaber (No 2) [2025] UKSC 43
• Maher v Investalet Limited [2025] EWHC 3133 (Ch)

Read the latest CRI Cases Alerter authored by Phillip Patterson, Rory Cochrane and Miranda Sadler below.

Pagden v Ridgley [2025] EWHC 2674 (Ch)
Mr Justice Foxton

Facts

Two companies, Orthios Eco Parks (Anglesey) Ltd and Orthios Power (Anglesey) Ltd, which raised funds from selling bonds, entered insolvent administration. The bonds themselves were secured by way of floating charges and a fixed charge over land held by the companies. The security was held by a security trustee, Mr Colin. Mr Colin appointed Mr Ridgley as administrator of the companies, without consulting Cresta, the holder of the majority of the bonds issued. Mr Colin then signed a letter approving the sale of the land by Mr Ridgley on terms which provided Mr Ridgley a remuneration equal to 5% of realisations up to £25m and 15% of realisations over £25m. Under the arrangement, Mr Colin was also to receive 5% of the realised sum subject to a cap of £2m. Cresta then challenged Mr Ridgley’s remuneration under r 18.34 of the Insolvency (England and Wales) Rules 2016. At first instance, ICC Judge Greenwood held that the court did not have jurisdiction to hear the application under r 18.34 because Mr Ridgley’s claim for remuneration was solely referable to an asset subject to a fixed charge (the Land) and was advanced under a contract with the secured creditor. Cresta appealed.

Held 

The appeal was dismissed, and the reasoning of ICC Judge Greenwood was both endorsed and praised in the judgment. The land sold pursuant to the agreement was a fixed charge asset which fell outside the insolvency estate of the companies. There is an important distinction to be drawn between such assets and assets of the companies which are available for distribution to the unsecured creditors. In the latter category, the court has a supervisory role in relation to the remuneration of office-holders as the level of remuneration bears upon the availability of assets for distribution.
No such issue arises in respect of fixed charge assets. Furthermore, were the assessment of remuneration payable out of fixed charge assets within the scope of r 18.34, it could lead to circumstances in which the fixed charge holder themselves would be excluded from the process by which the appropriate remuneration can be assessed, despite that remuneration being taken from their fixed charge assets.

Parkins v Hayes [2025] EWCC 46
Recorder: Eaton Turner

Facts

At a meeting of the creditors of Mr Hayes on 16 May 2023, an Individual Voluntary Arrangement (IVA) was approved. That IVA was then challenged by a creditor, Mr Parkins, who argued that a debt approved for voting purposes should have been rejected at the creditors’ meeting. That challenge succeeded because the creditor, French & Co, was unable to demonstrate the existence of the debt on the balance of probabilities. Although Mr Hayes failed to make the lump sum payment into the IVA as agreed, his wife did make a voluntary contribution which generated a fund, held by the IVA supervisor, at the time the challenge succeeded. At a consequentials hearing, various applications for costs were made. The IVA supervisor, Mr Duffy, sought to recover his costs out of the fund created by the voluntary contribution, arguing in accordance with existing authorities that the fund was held on trust subject to the terms of the IVA.

Held

This decision casts doubt upon received wisdom from many authorities, including the decision of the Court of Appeal in Re NT Gallagher & Son Ltd [2002] 1 W.L.R. 2380 regarding the status
of funds paid into an IVA or CVA prior to the debtor being made bankrupt or entering liquidation. Those authorities held that the funds are held on trust for the benefit of the IVA or CVA (as the
case may be) and fall outside the assets of the insolvent estate. In this case, the Recorder observed that in all those earlier authorities, the voluntary arrangement always failed as a result of default by the debtor and termination at the election of the creditors and supervisor. He indicated, obiter, that where the voluntary arrangement is successfully challenged by way of an application under s 6 or s 262 of the IA 1986, the position may be different and, in such circumstances, the assets should fall into the insolvency estate. Mr Duffy’s application for costs was, in any event, refused and, therefore, the issue did not arise.

Mitchell v Sheikh Mohamed Bin Issa Al Jaber (No 2)[2025] UKSC 43

Court: Supreme Court of the United Kingdom
Judge(s): Lord Hodge, Lord Briggs, Lord Sales, Lord Stephens, Lord Richards

Facts

MBI International & Partners Inc (Company), a BVI company in liquidation, owned 891,761 shares (891K Shares) in JJW Hotels & Resorts Holding Inc acquired in 2009 for approx. €88.9m, with the price payable “on demand” but never in fact paid. A winding-up order was made in respect of the Company in 2011, bringing the director’s (the Sheikh) powers to an end under s 175(1) BVI Insolvency Act 2003, although he remained a de jure director under BVI law. In 2016, the Sheikh dishonestly backdated and executed share transfers purporting to dispose of the 891K Shares to another group entity, JJW Guernsey. In 2017, the 891K Shares were transferred within the group before JJW Inc’s assets and liabilities were moved to JJW UK (Transfer), an intra-group transaction said to render the 891K Shares valueless.

The liquidators obtained judgment at first instance against the Sheikh for equitable compensation of €67.1m on a substitutive basis. The Court of Appeal reduced the award to nil on the footing
that the shares were worthless by trial as a result of the Transfer.

Held

The Supreme Court dismissed the Sheikh’s appeal on liability and restored the trial judge’s award of equitable compensation. There were three issues for the Supreme Court – summarised as follows:

Equitable compensation
There is no fixed rule that equitable compensation (even on a substitutive basis) must be assessed at the date of trial; the appropriate date depends on what is just and equitable between principal and fiduciary.

In a substitutive claim for misappropriated property, the principal suffers an immediate loss if the property had value when taken, and the burden lies on the fiduciary to prove any supervening event that should diminish that loss.

Where the fiduciary has “a hand” in the supervening event that destroys value, that event will rarely break the chain of causation absent a clear and convincing innocent explanation, which the Sheikh failed to provide.

Breach of fiduciary duty
A director whose formal powers have ceased on liquidation can still owe fiduciary duties if he in fact assumes to act in that role, by analogy with a trustee de son tort. By purporting to exercise directorial powers to procure and register the 891K Share transfers in 2016, the Sheikh assumed the duties of a properly appointed director, including the duty to have regard to creditors’ interests on insolvency.

Unpaid vendor’s lien
An unpaid vendor’s lien arises by operation of law but is excluded where inconsistent with the contract or the true nature and commercial purpose of the transaction. On the facts, recognising liens in favour of the vendors (even though the purchase price for the 891K Shares was never paid) would have been “wholly at odds” with the IPO-focused structure and would improperly give the vendors ongoing control, so no such lien reduced the Company’s loss.

Maher v Investalet Limited [2025] EWHC 3133 (Ch)
ICC Judge: Greenwood

Facts

Pocket Renting Limited (the Company) owned a number of properties which were let to Investalet Limited (the Respondent). After the Company went into administration, the Respondent stopped paying rent. The administrators served notices to quit on the Respondent and on those who were occupying the properties as sub-tenants. When the Respondents and sub-tenants failed to vacate,
the administrators of the Company sought an order under s 234(2) of the Insolvency Act 1986 (IA 1986) for vacant possession of the properties against the occupiers as trespassers.

Section 234(2) provides that:

“Where any person has in his possession or control any property, books, papers or records to which the company appears to be entitled, the court may require that person forthwith (or within
such period as the court may direct) to pay, deliver, convey, surrender or transfer the property, books, papers or records to the office-holder.”

Property in this context includes land: s 436 of the IA 1986.

The issue was whether an order for vacant possession of property from a trespasser could be an order to “pay, deliver, convey, surrender or transfer” the property to an office-holder for the purposes of s 234.

Held

Dismissing the application, ICC Judge Greenwood found that the administrators could not rely on s 234 to obtain vacant possession against trespassers.

The judge agreed with the obiter view expressed by Snowden LJ in Carvill-Biggs v Reading [2025] EWCA Civ 619 that s 234 was not intended to apply in this situation. Although a trespasser has an interest in the land that is capable both of being transferred and asserted against others with an inferior (or no) right in the land, the trespasser cannot assert it against a person with a superior right. Therefore, a trespasser cannot “pay, deliver, convey, surrender or transfer” the land to that person. The fact that the obligation to give vacant possession involves returning the property free of people, chattels and interest did not make this a relevant “transfer” for the purposes of s 234.

The court therefore could not grant relief under s 234. Instead, the correct route was for the administrators to seek a possession order under CPR Pt 55 in the name of the company. The judge considered that the administrators would have been entitled to possession under Pt 55 against the occupiers as trespassers and would have granted that order, had that jurisdiction existed.