Newbridge credit union fees may face forensic analysis, court told
The President of the High Court has indicated there may yet have to be a forensic examination by the court of the actual work done for a further €563,000 fees sought by the special manager of Newbridge Credit Union and his staff.
For a credit union with small depositors – who will have to pay the fees – the sums sought are “enormous”, Mr Justice Nicholas Kearns said.
The total costs of special manager Luke Charleton of Ernst Young and his team and lawyers, appointed in January 2012, are now expected to be close to €2 million.
It was stressed yesterday there is no issue with the validity of Mr Charleton’s appointment, his qualifications, expertise and entitlement to be paid. Mr Charleton’s rates are now €375 an hour, with descending rates for his staff, the court heard. Those rates are in accordance with the rates of other insolvency practitioners over the past two years, his counsel Rossa Fanning said.
In opposing the latest fee application, the credit union’s directors complained they were given an A4 page of hours worked by the special manager and his staff but neither that nor other material indicated precisely what work they were doing.
Bernard Dunleavy, for the directors, said while it was said the special manager had tried to use the services of credit union staff where appropriate, the directors did not understand how that measured up with the fees bill. There was no detail on foot of which the court could decide the value of work done, he added.
While recognising the “great value” of Mr Charleton’s work, Mr Justice Kearns was acutely conscious everyone was experiencing financial difficulties and members needed assurance the fees charged are reasonable.
‘A to Z’ examination
If agreement could not be reached on fees, the court may have to engage in examining the nature of the work done “from A to Z” in special manager appointments, the judge indicated. He also suggested the Central Bank – which sought the special manager’s appointment in January 2012 – might take on a more “active role” as to what fees are appropriate.
Mr Charleton previously agreed to cap his fees at €9,500 weekly for “business as usual” work from July 2012.
After discussions, Mr Fanning told the judge Mr Charleton was offering to cut his fees by a further 5 per cent, following a 11 per cent cut imposed by the court in February 2012. The directors would be given access to time sheets and material relating to work done by Mr Charleton.
The directors hoped, after an examination of the material, the special manager may come to “a more realistic assessment” of what would be an “appropriate” fee level.