Vol 23 (2026) - Issue 3

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Re Argentex LLP (in special administration) [2025] EWHC 2625 (Ch); [2025] EWHC 3125 (Ch)

Synopsis
The special administrators of Argentex LLP ('Argentex'), an FCA-regulated payment services firm which offered spot, forward and option foreign exchange contracts to its customers, sought directions from the English High Court on questions relating to what is known as the Lundy Granite principle on liquidation or administration expenses.
The Court considered whether the special administrators, by not performing the foreign exchange contracts in the trading book as they reach maturity,
have adopted those contracts. This would in turn cause liabilities arising under those contracts to rank as administration expenses with resulting super priority in the expense waterfall. The answer to this question was in the negative.
The Court further considered whether, if permitted by the terms of the underlying foreign exchange contracts, the special administrators would likewise be taken to have adopted those contracts and elevated the ranking of those liabilities if they elected to close out Argentex's trades before maturity. The answer here was also in the negative, although this question became academic as the Court found in a later judgment that, on a proper construction of the underlying contracts, Argentex did not have a contractual right to close out the trades before the agreed maturity date.