English High Court supports creditors' choice in payment institution collapse

The High Court has considered whether to approve a special administration order for JNFX Limited, and which insolvency practitioners should be appointed to manage the process.

Background 

JNFX Limited (the Company) is a foreign exchange services provider regulated by the Financial Conduct Authority (FCA) as an authorised payment institution. The Company became insolvent following a judgment against it for £3.4 million, which it could not pay. The Company's directors applied to place the Company into special administration, but disagreed with creditors about who should be appointed as administrators.

Decision 

The Court granted a special administration order solely on grounds that the Company was unable to pay its debts, whilst noting that an investigation of the conduct of the business may be required.  

The Court appointed the creditors' proposed special administrators. It determined that where creditors have a clear preference, their wishes should prevail as the administration ultimately benefits them.

Key takeaways 

The nomination of administrators by directors or regulators is not determinative, here the court prioritised the creditors' views over those of the FCA who supported the appointment of the administrators proposed by the company. 

When administrator candidates are equally qualified, creditor preference – particularly of majority creditors by value – becomes the decisive factor (here the creditors represented 88% of liabilities by value). 

Find out more 

To discuss the issues raised in this article in more detail, please contact a member of our Restructuring and Insolvency team.

Eisenberg v JNFX Ltd [2025] EWHC 3090 (Ch)