Blankstone Sington clients fully repaid as special administration moves toward creditor dividend

Blankstone Sington’s special administrators have returned 100% of client money and custody assets following the bulk transfer of the failed Liverpool wealth manager’s private client business to Redmayne Bentley, marking the central milestone in a case that began after the FCA imposed restrictions on the firm almost two years before its collapse.

The latest progress report from Andrew Poxon, Alex Cadwallader and Hilary Pascoe of Leonard Curtis confirms that all eligible clients transferred to Redmayne through a single bulk transfer representing more than 99% of the company’s clients. A small number of clients who were not eligible for transfer have also now received their custody assets or client money through their preferred method. Blankstone no longer retains any client assets or client money.

Blankstone was placed into special administration on 13 October 2023 after earlier attempts to find a buyer for the business failed. The administrators selected Redmayne Bentley as the preferred broker following a process designed to reunite clients with their assets more quickly than a direct distribution. The transfer was completed on 17 June 2024, with the administrators continuing to sweep through residual dividends and receipts linked to corporate actions after the settlement date.

The report confirms that the return of client assets was made possible by FSCS compensation covering costs that would otherwise have been paid from client money and custody assets. The FSCS found that the vast majority of clients were eligible for compensation for the transfer costs. For the small group of ineligible clients, the administrators agreed, in consultation with the FSCS, that those costs would be waived.

The focus has now shifted to house assets (Blankstone's own assets, excluding custody assets and client money) and creditor recoveries. The administrators say there are enough realisations, after house estate costs, to pay preferential and secondary preferential creditors in full and make a partial distribution to unsecured creditors. HMRC’s preferential claim was reduced to £90,501.71 after a VAT refund was offset against the claim, and a first and final dividend of the same amount was paid on 23 December 2025, producing a full 100 pence in the pound recovery for secondary preferential creditors.

Unsecured creditors remain the main unresolved constituency. The administrators initially estimated unsecured creditor claims at £917,912, but that total has increased after additional claims, including £182,393.11 from the Redundancy Payments Service, £8,360.85 from HMRC for employer National Insurance contributions, and a defined benefit pension scheme claim of £2.143 million, compared with an initial estimate of £641,000. The administrators also finalised a landlord dilapidations, arrears of rent and service charge claim at £226,705.08.

No claims have been received from money clients or asset clients for shortfall claims, nor have the administrators received any indication that such claims will be made. On current indications, they expect to issue a notice of intended dividend to unsecured creditors for an interim distribution after the reporting period, although the amount remains to be determined.

The administrators have also improved recoveries through a VAT process with HMRC. Because Blankstone was an investment bank and only partly exempt from VAT, the administrators applied for a Partial Exemption Special Method to recover a portion of input VAT incurred during the special administration. HMRC agreed an 86% recovery rate, now extended until March 2027, and the administrators have received a refund of £1.306 million to date.

The special administration remains open while the administrators deal with residual distributions, creditor claims, VAT recoveries and exit planning. The special administrators say the most appropriate exit is expected to be dissolution once all relevant distributions have been made and statutory obligations completed, although no definitive timetable has yet been provided.

Read the administrators’ latest progress report here.

Ashurst continues to provide legal advice, with Hill Dickinson advising on employment issues and the asset sale agreement, and Crowe UK handling the reconciliation and audit of custody assets and client money.