High Court cuts Icarom administrator's fees by 25%
THE PRESIDENT of the High Court has cut by 25 per cent the €480 per hour fees sought by the administrator of insurance company Icarom plc and also cut the average €330 hourly fees for his staff after noting “a great deal of public disquiet at the level of fees charged for this type of work”. The fees sought were not objected to by the Central Bank.
Icarom was formerly the Insurance Corporation of Ireland plc, which collapsed in the 1980s leading to the imposition of an insurance levy. The administration has lasted almost 30 years and is expected to conclude shortly. Some €10 million was paid back to the State’s insurance compensation fund out of the administration last year.
Donal O’Connor was appointed Icarom administrator in 1990 and, after he retired in 2008 as a partner in accountancy firm PricewaterhouseCoopers in 2008, the Department of Finance agreed he would continue in that role with the assistance of PwC staff.
Mr Justice Nicholas Kearns said yesterday that because he must be satisfied the fees sought were not in excess of the norm approved by the court he would not approve these fees and was cutting them by 25 per cent.
In addition to the €480 fee claimed by Mr O’Connor, he was told the average hourly fee of other staff of PwC involved in the administration was €330. That average, the judge noted, took into account the lower rates of “foot soldiers”.
The court heard the hourly rate of partners in PwC was €580 but Mr O’Connor was not seeking that and was instead seeking €480 an hour.
In calculating the hourly rates, Mr O’Connor said in an affidavit he applied the same method of charging and basis of charging used by PwC for any other commercial client. The rates charged for PwC staff in the period January to December 2011 ranged downwards from €580 for a partner, €470-€390 for directors, €480-€355 for senior managers and €105-€148 for assistants.
The judge approved without alteration the fees sought by Deloitte as auditors to Icarom, which he was told averaged out at €180 an hour.
The firm will receive almost €50,000 for their work for Icarom in 2010 and the judge reappointed it to audit the company for 2011 and 2012.
The Central Bank had indicated in a letter to solicitors for the administrator it had no objection to yesterday’s fees application.
ICI was placed in administration in 1985, when William McCann was appointed administrator. In 1990, ICI changed its name to Icarom plc and Mr O’Connor was appointed administrator.
Mr O’Connor had claimed fees for himself for 2010 and 2011 at €480 per hour and also sought approval of fees for PwC staff involved in the administration.
For a total 641 hours work by himself and his staff in 2010, the administrator sought some €211,843, excluding VAT. That included €72,960 for himself for 152 hours’ work at €480 an hour.
For 2011, Mr O’Connor claimed about €291,000, plus VAT, as remuneration for himself and his staff for some 794 hours worked. That included €96,480 personal remuneration for 201 hours worked.
Other reports indicated some €400,000 was being retained to cover the remuneration of the administrator and his staff for the period from February 8th, 2011, to January 10th, 2012.
In the report for the period to the end of 2011, the administrator said he was hopeful a successful transaction could be completed in 2012 and work was continuing to resolve two remaining key issues.