Evidence and evidence gathering

The Insolvency Act 1986 (IA 1986) and the Insolvency (England and Wales) Rules 2016, SI 2016/1024 give insolvency office-holders in certain situations the power to obtain property (which includes cash, books, records and documents) of the insolvent company or bankrupt. IA 1986 imposes a duty on certain individuals and entities to co-operate with the office-holder, and imposes sanctions in the event that they fail to do so. In addition, certain individuals or entities are required to deliver up accounts or explanations (either orally, in person or by way of a sworn statement) detailing their dealings with the affairs and property of the insolvent individual or company.

The purpose of the powers is to allow the office-holder to reconstitute the knowledge of the insolvent company or individual, which may allow previously unknown assets to be realised for the benefit of creditors.

Corporate insolvency

Where a company enters into one of the applicable insolvency processes (being, under IA 1986, s 234(1), administration, administrative receivership, liquidation or provisional liquidation), certain persons and entities owe duties to the appointed office-holder to deliver up company property, provide information

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Rational FX—court sanctions distribution plan amid regulatory uncertainty (Kicks and another v MLS-Multinational Logistics Services Ltd (a company incorporated in Malta))

Restructuring & Insolvency analysis: On the 28 July 2025, the court approved a distribution plan in the special administration of Rational Foreign Exchange Ltd (RFX), enabling the joint special administrators (Kristina Kicks and Edward Boyle of Interpath) (Special Administrators) to return safeguarded funds to customers. The Special Administrators also sought declaratory relief regarding the status of European domiciled customers, following the repeal of passporting rights under the Payment Services Regulations 2017 (PSR 2017) post-Brexit. RFX employed various methods to continue servicing European clients, some lacking proper regulatory basis. This required the Special Administrators to determine whether such clients were customers of RFX or separate European entities. This was a key issue given the shortfall in safeguarded funds available for distribution. The court granted the relief sought by the Special Administrators and set out guidance to assist in clarifying customer status. This case marks only the second reported judgment approving a distribution plan in respect of a payment services firm under rule 114 of the Payment and Electronic Money Institution Insolvency Regulations 2021 (2021 Regulations), and the first involving European domiciled business and a significant shortfall in safeguarded funds. In absence of specific guidance under the 2021 Regulations and the Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021 (2021 Rules), the court applied among other things the three-stage test from Re SVS Securities Plc assessing; (i) fairness and reasonableness of the proposed distribution; (ii) progress of the special administration; and (iii) adequacy of stakeholder engagement. Written by Brian Rostron, associate and Kelvin Riley, associate at Addleshaw Goddard LLP.

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