Kession Capital forced into liquidation after creditors reject administrators' proposals

The High Court has ordered the compulsory winding up of Kession Capital Limited, rejecting administrators’ efforts to “hold the ring” and keep the company in administration while awaiting the outcome of a pending Supreme Court appeal.

Kession was incorporated in March 2012 and operated as an FCA-authorised regulatory hosting business, supporting investment activities including the promotion of collective investment schemes. Its collapse followed litigation brought by investors who alleged losses arising from those schemes, culminating in High Court judgments exceeding £1 million against the company. After a key creditor demanded payment in April 2025, and with enforcement action imminent, the company entered administration on 28 April 2025, primarily to obtain the benefit of the statutory moratorium while it pursued a further appeal to the UK Supreme Court.

The joint administrators’ proposals, circulated in June 2025, were ultimately rejected at a creditors’ meeting held on 7 August 2025. The administrators then brought an application for directions, urging the Court to allow the company to remain in administration pending the outcome of the Supreme Court’s decision. Their request was strongly opposed by 26 judgment creditors, who collectively controlled the outcome of any vote and pressed for immediate liquidation. The application was heard on 3 March 2026. Deputy ICC Judge Curl KC made an order at the end of the hearing for the company’s compulsory winding up, with fuller written reasons to follow.

Those reasons, which were released on 7 April, conveyed the judge’s conclusion that there was no rational basis for the company to remain in administration after the administrators’ proposals were rejected and all participating creditors opposed continuation of the process. The Court found that the administration itself had been initiated primarily to shield the company from enforcement action while it pursued the Supreme Court appeal, rather than to achieve a statutory purpose under Schedule B1 of the Insolvency Act 1986. The company had ceased trading, had no active business, and was balance-sheet insolvent regardless of the appeal’s outcome.

Central to the ruling was the administrators’ reliance on the “realisation” objective under paragraph 3(1)(c), justified by the existence of a preferential claim of just £800 owed to the company’s director and majority shareholder. The Court described this as a “thin basis” for invoking the administration regime, particularly in the absence of secured creditors or any realistic prospect of rescue or improved creditor outcomes.

The judgment also considered the conduct of the creditors’ decision process. The administrators had incorrectly valued substantial creditor claims at £1 for voting purposes on the basis that they were disputed, a position later conceded to be legally flawed. The Court reaffirmed that disputed debts, particularly those embodied in judgments, should generally be admitted for voting unless plainly bad, with any objection noted rather than used to suppress voting rights.

Further criticism arose from the administrators’ initial failure to apply rules excluding connected creditors from decisive voting calculations. That error, if uncorrected, could have led to improper approval of the proposals. The Court stated:

“In my view, the qualified status of connected creditors' voting rights for certain purposes is not an obscure part of the insolvency regime. I would expect most people engaged in the practice of insolvency, and certainly all licence-holders, to know about it. If there is anything bizarre around this part of the case, it is the fact that a mistake of this nature came to be made by an experienced appointment-taker in circumstances where, had the error not been detected, it would have been decisive of the outcome. Given that the mistakes discussed under this heading were made, it is not difficult to appreciate why the Interested Parties do not have confidence in the Administrators.”

The administrators’ justification for continuing the administration, including preserving FCA authorisation and the possibility of refinancing, was rejected as speculative and unsupported by evidence. The Court noted that any appeal could have been pursued equally in liquidation, and that no credible funding or restructuring pathway had been identified.

Ultimately, creditor opposition was determinative. With 100% of creditors expressing a view against continued administration, and a key judgment creditor retaining a blocking position regardless of the Supreme Court outcome, there was no realistic prospect of any future proposals being approved.

On that basis, the Court exercised its power under paragraph 55(2)(e) of Schedule B1 to order compulsory liquidation and appointed Huw Powell and Paul Wood of Begbies Traynor as joint liquidators.

The administrators subsequently agreed to waive certain fees and costs, and to contribute to the creditors’ costs, bringing the matter to a close.

Read the decision here.

Professionals involved:

• Samuel Parsons of Erskine Chambers (instructed by Acuity Law) for the opposing creditors

• Simon Jones of Enterprise Chambers (instructed by Coyle White Devine Solicitors) for the joint administrators

Interestingly, after the judgment was circulated to the parties in draft, the Supreme Court handed down judgment on 1 April 2026 unanimously allowing the company's appeal.