Court approves a distribution plan in a special administration
In February 2024, the FCA declared Blankstone in default as it owed money to clients which it could not meet itself. It held a little over £270,000,000 for 1,200 clients.
The joint administrators applied for approval of a distribution plan to able sums to be returned to clients. The distribution plan had been approved by the creditors' committee, all of the rules for giving notices to clients had been complied with and no one had objected, and the FCA had commented on the plan with no objections.
The court approved the plan following the approach adopted in SVS Securities Plc [2020] EWHC 1501:
- The first objective of the special administration regime is to return client assets as early as possible, and a plan should provide a fair and reasonable means of effecting that.
- While the court must exercise its own judgment, the context of the hearing is important. The judgment of the administrators, views of the FCA, and ability of the creditors' committee to scrutinise and comment on the plan were relevant, as were those of the FCA and creditors.
- Provided those have been given the proper opportunity to make representations and had agreed (or at least not objected to), the court should be slow to withhold approval or impose its own plan.
Blankstone Sington Limited (in special administration) [2024] EWHC 1111 (Ch)