New Judgment: Re Argentex LLP (In Special Administration) [2025] EWHC 2625 (Ch)

Argentex was placed into special administration on 21 July 2025. Its business included the provision of foreign exchange services. The trading book comprised contracts for foreign exchange derivatives (forwards and options) that Argentex had written for its customers. As at August 2025, the trading book included a total of 3,346 open transactions for 302 customers.

After the Special Administrators concluded that a sale of the trading book was not possible, they considered that it would be desirable, if contractually entitled to do so, for Argentex to close out the contracts that make up the trading book and pursue the debts which would arise on any close out.

The Special Administrators sought directions from the Court as to whether: (i) their proposed course action would create any liabilities as an expense of the administration (the “Expense Question”); and (ii) Argentex was entitled to close out the contracts which made up the trading book (the “Termination Question”).

In relation to the Expense Question, the Judge (ICC Judge Agnello KC) held that the Special Administrators would not be incurring any liabilities as an expense of the special administration by: (i) not performing the contracts which made up the trading book as they reach maturity following the appointment of the Special Administrators; or (ii) closing out the customer contracts that make up the trading book.

As to non-performance, it is well established that ‘doing nothing’ does not create a liability as an expense of the administration. As to close out, whilst close out involved a positive step being taken by Argentex under the terms of the contracts (an election to close out) that did not lead to any liability as an expense. At its highest, the ability to exercise the closing out may enable the Special Administrators to pursue what they consider are debtors of the firm for a precise crystallised. That did not fall within the scope of the Lundy Granite principle and create a “super priority” expense claim in relation to any unsecured creditor’s claims arising against Argentex on close out of an “in the money” contract.

Richard Fisher KC appeared on behalf of a representative party which was “out the money” and Marcus Haywood appeared on behalf of representative parties who were in “in the money”.

The full judgment in relation to the Expense Question can be read here.

Judgment in relation to the Termination Question is awaited.