Glint Pay - Case Update

The High Court has rejected claims by companies formerly under administration challenging their administrators’ appointment as an improper takeover attempt by the floating charge holder.

The case concerned Glint Pay and its subsidiaries, a fintech company that developed an app which permits users to make payments linked to the price of gold. In 2019, Niven Alpha, a special-purpose vehicle linked to Global Precious Metals, acquired secured debt in Glint Pay and sought to use defaults to appoint administrators with a view to acquiring the business—a “common fact pattern” which is “per se uncontroversial” and “at least as old as Wuthering Heights”, according to the Court. The interesting point was that the company was not insolvent at the relevant time, and the default was non-financial, relating to the provision of information.

The company’s existing shareholders, unimpressed with this manoeuvre, raised sufficient further capital to enable the company to refinance the debt. Following some negotiation, the potential purchaser retreated, the administrators resigned, and the company was ultimately left in the hands of its original owners.

The companies later sought to challenge the validity of the administrators’ appointments, arguing that the floating charge holder had made the appointment for an improper purpose—namely to acquire the business—and that any events of default committed did not entitle the floating charge holder to appoint administrators.

The Court rejected these arguments, finding that the assignment of the debt to Niven Alpha transferred the full bundle of lender rights, including the information obligations, and that Glint Pay’s failure to provide any information in response to Niven Alpha’s July 2019 request constituted a clear event of default. The judge dismissed Glint Pay’s narrow interpretation of “secured assets” and held that the obligation extended to the company’s business generally, not just physical fixed assets. Even if construed narrowly, elements of the request (such as cash balances) still fell within scope.

On the “improper purpose” argument, the Court confirmed that seeking the appointment of administrators to allow an independent officer to take control of the business—even if with the expectation of later acquisition—was not improper. As a result, the Court struck out the claim, holding that Glint Pay had no realistic prospect of showing that the administrators were invalidly appointed.

Read the decision HERE.

Professionals involved:

• Lexa Hilliard KC and Jack Watson of Wilberforce Chambers (instructed by Reynolds Porter Chamberlain) for the former joint administrators, Jason Baker and Geoffrey Rowley of FRP Advisory

• Jonathan Miller of 1EC Barristers (instructed by Greenwoods) for Glint Pay