[2025] EWHC 2674 (Ch)

Fecha: 17-Oct-2025

The background

The background

The Companies formed part of the Orthios Group which operated various businesses from the former Anglesey Aluminium Ltd site in Holyhead, Anglesey (“the Land”). The Orthios Group raised funds from Cresta Energy Limited (“Cresta”) which invested £66m in bonds issued by the group through MPB Eco Parks Limited (“MPB”); and also from 300-400 retail investors who invested £26.4m in bonds.

The bonds were secured by:

a fixed charge over its part of the Land granted by OEPAL;

ii)

a floating charge granted by OEPAL.

iii)

a fixed charge over its part of the Land granted by OPAL; and

iv)

a floating charge grated by OPAL.

all of which security was held by Mr Colin, as security trustee, under the terms of the Security Trust Deed.

The floating charges were qualified floating charges for the purpose of paragraph 14(2) of Schedule B1 to the Insolvency Act 1986 (“the 1986 Act”), giving Mr Colin (as Security Trustee) the right, following an Event of Default, to appoint administrators over the Companies. On 25 March 2022, Mr Colin exercised those powers and appointed the Respondent (“MrRidgley”) as administrator of the Companies. Mr Ridgley had little more than two years’ experience of accepting appointments as administrator. On the evidence, Mr Colin made the appointment without first consulting Cresta. That appointment gave Mr Ridgley the status of an office-holder (and specifically) an administrator under the Insolvency (England and Wales) Rules 2016 (“the 2016 Rules”) and associated legislation.

At some point in late April 2022, Mr Colin signed a letter approving the sale by Mr Ridgley (as administrator of the Companies) of the Land held under the fixed charges, and providing for the payment of the following amounts from the proceeds of sale of the Land:

As remuneration to Mr Ridgley, 5% of realisations up to £25m and 15% of realisations in excess of £25m.

ii)

As payment of Mr Ridgley’s solicitors’ fees, 1% of realisations up to £25m and 5% in excess of £25m.

iii)

As payment of the fees of the selling agent, Hilco Global (“Hilco”), 2% of realisations.

Mr Colin also claimed remuneration of 5% of the realised amount himself, capped at £2m.

When it became aware of the scale of the fees, Cresta objected to them. It estimated the value of the Land at £44m, on which basis the various fees would be very large. It informed Mr Ridgley of its objections.

After Mr Colin failed to react to its concerns in a manner which satisfied them, on 6 July 2022, Cresta and MPB applied to the court to remove Mr Colin from the office of Security Trustee on various grounds, including the amount of the fees agreed. This application was supported by the Financial Services Compensation Scheme, and 82% of the creditors secured under the Security Trust Deed. An application by Cresta to expedite the removal application was filed by Cresta and resisted by Mr Colin, with the support of Mr Ridgley.

The Land was sold on 9 September 2022 for £35m. As a result, Mr Ridgley was paid fees of £2,765,000 and Howes Percival LLP, the solicitors acting for Mr Ridgley, £755,000 (in each case exclusive of VAT). The total amount owed to bondholders and secured by the fixed and floating charges as at the date of the administration was £85.62m. The administrator reported on 28 September 2022 that “there is very little in the way of known floating charge assets that is it anticipated will result in any significant realisations being achieved”. Mr Hughes of the Appellants’ solicitors confirmed in evidence that the “only asset of note is the Land”. I do not understand that statement to be in dispute. The evidence suggests that the value of the “prescribed part” was a little over £7,200, before taking account of expenses, with any payment to unsecured creditors nominal at best. The position, therefore, is that on any view of the figures, the value of the security subject to the fixed charges would not come close to discharging the amounts secured by those charges, and this would be so even if the fees and expenses paid in respect of the sale were significantly lower, nor would there be any realistic prospect of the secured creditors’ unsecured claim materially diluting the unsecured creditors’ recovery from the prescribed part. To the extent that complaint can be made about the manner in which the sale of the Land was conducted, the economic effects will have been felt by the beneficiaries of the fixed charges.

10.

After the sale of the Land and payment of the fees had taken place, Mr Colin agreed to his removal, and he was removed from office by Order of HHJ Malcolm Davis-White KC on 12 October 2022. Mr Pagden was appointed in his place.

11.

On 19 May 2023, the Appellants brought an application in the Insolvency and Companies List seeking relief under rule 18.34 of the 2016 Rules on the basis that the remuneration charged by Mr Ridgley, and the amount he had agreed to pay his solicitors and the agents, was in each case excessive.

12.

The application was heard by ICC Judge Greenwood on 3 and 4 July. He delivered a detailed judgment rejecting the application:

He held that the court did not have jurisdiction to hear the application under Rule 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. He held that the court did not have jurisdiction under Part 18 of the 2016 Rules (and specifically Rule 18.34) to determine the amount of an administrator’s fees and expenses which were to be paid from the proceeds of sale of an asset subject to a fixed charge, rather than assets held by the insolvent company for the benefit of its creditors. This finding gives rise to Ground 1 of the appeal.

ii)

He rejected Mr Ridgley’s contention that any Rule 18.34 claim was time-barred. There has been no cross-appeal against that determination.

iii)

He also rejected Mr Ridgley’s argument that Mr Pagden, as successor in title to Mr Colin as Security Trustee, was estopped by convention from challenging the realisation costs agreed by Mr Colin. Once again there has been no cross-appeal against that determination.

iv)

He held (apparently as an independent reason for rejecting the application) that Mr Pagden was unable to challenge the agreement because he stood in no better position than Mr Colin in this respect, with Mr Colin having agreed the fees as a matter of contract. This is Ground 3 of the appeal.

He held that Messrs Miller and Katz did not have standing under Rule 18.34 (had it otherwise been applicable), albeit he rejected Mr Ridgley’s contention that, had it been joined, OAT would not have had standing to bring a Rule 18.34 application, had the rule applied. There has been no appeal or cross-appeal in relation to this aspect of the Judge’s decision.

13.

The Appellants obtained permission to appeal on three grounds:

Ground 1: The Judge’s finding that remuneration agreed in connection with an administrator realising property which is subject to a fixed charge is not within Part 18 of the 2016 Rules and cannot be challenged under r.18.34 of the 2016 Rules.

ii)

Ground 2: in the alternative the court should have heard and determined the Appellants’ challenge to Mr Ridgley’s remuneration under its inherent jurisdiction.

iii)

Ground 3: the Judge was wrong to hold that Mr Pagden’s challenge was defeated by the contract his predecessor in title as Security Trustee had entered into.

14.

On 27 March 2023, the Companies were put into compulsory liquidation, and on 21 April 2023, joint liquidators were appointed by the Secretary of State.