TIME IS JUST THE START

Following on from my previous article about the attempts for the joint administrators of Nortel Networks France to get their remuneration approved by the court when there were no longer any creditors to approve it, the independent assessor has report to the Court and Snowden J has given his view on the matter (Re Nortel Networks France SAS [2019] EWHC 2778 (Ch)).

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The only numerical reduction recommended by the assessor was in relation to the CVA remuneration which was charged at hourly rates 15% above those charged for the administration in the same period [10]. This resulted in a modest reduction of about £36k from the £1.6m sought by the joint administrators.

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However, the assessor was also critical of the failure of the joint administrators to engage with the creditors regarding their fees at an earlier time when approval or support from the relevant stakeholders might have been obtained thereby obviating the need for much of the application and the costs thereof [11-12]. This had an effect on two further matters relating to the fees of the joint administrators.

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Firstly, it meant that the joint administrators did not seek to amend their application to request payment of an overrun on their budgeted costs of some £71,051 as a substantial amount of the work related to the application to have the fees approved which, as noted above, might have been avoided [15].

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Secondly, the judge decided that the joint administrators could only have £100,000 [28] of the £150,000 set aside for the costs of the exercise, notwithstanding that the actual costs came to about £220,000 [18].

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Therefore, as well as the time costs which are being reviewed, when going to court to have the fees assessed, there myriad over considerations will include what steps could have been taken to obtain the consent of creditors to avoid the need for a court determination.

Finally, it can be noted that the costs of the assessor at £650 per hour amounted to £62,400 [20] but were still less than 30% of the costs of the assessment process, further evidence that getting an expert to look over any remuneration prior to embarking on the court assessment process (whether adversarial or procedural) can save significantly on the subsequent costs.

 

As published on 23 October 2019 on LinkedIn by Andrew Goodson, Insolvency Practitioner at Griffins https://www.linkedin.com/pulse/time-just-start-andrew-goodson/