The High Court has rejected a challenge by the liquidator of Bloxham to the Irish Stock Exchange’s decision to terminate the firm’s membership in December 2012. The court found the decision was made in good faith, supported by sufficient underlying facts and for the benefit of the exchange as a whole. It found no basis to interfere with it.
Bloxham, which was in liquidation, argued that its suspension and eventual expulsion improperly excluded it from a proposed restructuring known as Project Chrysalis. The plan was to wind up the Irish Stock Exchange and transfer its responsibilities to a new entity, allowing the exchange’s seven guarantor members to share reserves. Bloxham claimed it had been entitled to a share, but the judgment describes that expected return as dependent on other factors.
The court heard that Bloxham’s financial position came under severe strain in May 2012 after irregularities in its accounts were disclosed. The Central Bank directed the firm to cease regulated activities, and a provisional liquidator was appointed. The exchange suspended Bloxham’s membership. It later delegated consideration of termination to its head of regulation, Daryl Byrne, after guarantor-member directors left a board meeting because of potential conflicts.
In December 2012, Byrne told the liquidator he was considering revoking membership under exchange Rule 2.15, which allowed revocation where a member firm had not carried on business on the exchange for at least six months. He invited written representations. Bloxham’s solicitors objected, including on grounds of alleged bias and the timing of the decision. Byrne terminated the membership on 19 December.
The liquidator contended that the delay to Project Chrysalis and the process leading to the termination showed the decision was driven by an improper desire to exclude Bloxham and benefit other members. The exchange said the project faced regulatory and other external obstacles, and that Bloxham’s liquidation itself complicated progress. The judgment records that approval from the Central Bank had not been obtained and that the project remained uncertain.
The judge found no reliable evidence of a conspiracy, improper purpose, bad faith or excess of authority. He also concluded that the court could not substitute its own view for the exchange’s decision. The challenge therefore failed. The judgment does not order Bloxham’s reinstatement or award it a share of the proposed distribution.