The High Court reduced the remuneration claimed by the official liquidator of Haydon Private Clients Limited, trading as Haydon Investments, by a total of €25,000. The court measured fees for two periods at €93,778.75 net for July 2009 to November 2010 and €27,097.75 net for November 2010 to November 2011, with outlays and VAT to be added as claimed.
In a judgment delivered on 23 November 2012, Ms Justice Finlay Geoghegan said the first period’s net remuneration claim was €103,778.75. She allowed €93,778.75, a reduction of €10,000. The second period’s claim was €42,097.75 net; she allowed €27,097.75, a reduction of €15,000.
The liquidator had previously been permitted to retain €90,000 on account for the first period. The court said an unpaid element of €31,425.59 net had been omitted in error from estimates given to the investors’ Steering Committee during settlement discussions. The judge accepted that the omission was genuine but said the additional sum would reduce the distribution available to unsecured creditors. She also referred to earlier High Court decisions reducing charge-out rates.
The Steering Committee challenged the overall fees and relied on an estimate given in April and June 2011 of €40,000 net for the liquidator’s remuneration to completion. The judge found no significant work between November 2010 and November 2011 that the liquidator could not have anticipated when giving the estimate. She said an increase of about 20% could have been reasonable, absent clearly identified unforeseen work, and allowed slightly more than that calculation supported.
The court also considered increased rates charged for three staff members who had been promoted. They worked 134 of the 166 hours recorded by the liquidator and staff in the second period. The judge accepted that retaining staff familiar with the liquidation could be efficient, but said promotion alone did not justify charging the full increased rates. She found the increases, together with the lack of reductions to most staff rates following earlier High Court decisions, excessive in light of the work’s value.
Haydon had received more than €9 million from investors for an indirect investment in a property on Frunze Street in Kyiv, which proved unsuccessful. A dispute over about €1.9 million in two company bank accounts was settled in 2011: €640,000 was paid to the Steering Committee and Quotumas Investments Limited, and an amount was agreed for their admission as unsecured creditors.
The judgment determined the remuneration amounts but did not itself set out the final payment orders. The judge said she would hear counsel on the precise orders needed to give effect to the judgment, including payment of any balances and legal costs.