Judge dismisses Wilton claim to £5.6m Cyan recoveries

A High Court judge has rejected an attempt by three Guernsey vehicles associated with the Wilton Group to claim priority over more than £5.6 million recovered from two loan facilities originated by Cyan (another member of the Wilton Group) in 2020 and 2021, ruling that the entities presented no credible evidence that Cyan acted as their nominee and describing their case as dependent on “untruthful and unreliable” testimony from former Wilton chief executive Michael Flanagan.

Cyan (which entered administration in 2024) had advanced secured lending to Orex Consultancy and its affiliates under two senior secured credit facilities, one in 2020 and a second in 2021. The loans produced significant recoveries once Orex collapsed into administration. When the administrators collected the £5.6 million, GM Securities Opportunities 1001, 1002 and 1003 surfaced with a competing claim. They asserted that they, not Cyan, were the true economic lenders. Their theory depended on the proposition that Cyan provided the funding as a bare nominee and that the GM entities held the beneficial interest behind the 2020 and 2021 loans. According to their submissions, Cyan was simply fronting the lending activity while GM supplied the underlying capital and bore the economic exposure.

Judge Agnello found that the assertion collapsed under even modest scrutiny. The GM entities did not exist when the two facilities were agreed and drawn, and none of the relevant documentation identified Cyan as a nominee or trustee. Certificates that were said to evidence beneficial ownership contained errors, missing signatures, or were contradicted by the loan agreements themselves. The judge found Mr Flanagan’s explanations shifted depending on what inconsistency was put to him, and she concluded that his account was not credible when set against the contemporaneous documents.

The Court held that Cyan’s rights as secured creditor were properly established, and that the GM vehicles had failed to demonstrate any basis for overriding them. Their nominee theory was rejected in full. The Court found instead that Cyan had originated, funded, and administered the 2020 and 2021 loans in its own capacity and remained the sole party entitled to enforce the security.

The judgment then turned to a deeper problem inside the Wilton Group. Hartley Pensions Limited, a member of the Wilton Group which entered administration in 2022, asserts that at least £15 million used in the Cyan lending structure had been extracted from pension accounts without authority. Mr Flanagan admitted this for the first time during cross examination, a significant departure from his written evidence. Hartley’s administrators have not completed their tracing exercise, and concerns remain about the origin of the largest supposed repayment, a £13 million transfer believed to be connected to an Isle of Man trust.

While Cyan’s secured status was confirmed, the Court declined to determine who ultimately holds the beneficial interest in the recovered funds. Hartley’s constructive trust claim was allowed to proceed because the tracing evidence remains incomplete and because the provenance of the alleged repayment trail raises unanswered questions about the flow of pension money. The judge directed that the £5.6 million be transferred from Orex’s administrator to Hartley’s administrators to hold in a segregated account pending a future determination of beneficial ownership.

With the nominee theory dismissed and beneficial ownership unresolved, the case now moves into a second phase that will require fuller evidence from Hartley’s administrators.

Read the decision here.

Andrew Shaw of South Square (instructed by DWF) acted for Andrew Andronikou, Chris Newell and Michael Kiely of Quantuma and Andreas Arakapiotis of Kallis & Co (the joint administrators of WSL-Cyan Limited and Wilton UK (Group) Limited), while Kira King of South Square (also instructed by DWF) represented Peter Kubik and Brian Johnson of UHY Hacker Young (the joint administrators of Hartley Pensions).

Hugo Groves of Enterprise Chambers (instructed by Troutman Pepper Locke) acted for Nicholas Barnett of Libertas (the administrator of General Subsidiary 2 Limited, General Consolidated Limited and Orex Consultancy).

Olivia Chaffin-Laird of 33 Chancery Lane acted for GM Securities Opportunities 1001, 1002 and 1003.