Judge cuts hourly fee of examiner to Capital Bars

A HIGH Court judge has cut from €560 to €375 the hourly fee charged by the examiner to the failed Capital Bars group.

Kieran Wallace of KPMG was appointed last September as examiner to Capital which operated several well-known Dublin bars, including Cafe en Seine, the George and Howl at the Moon. The examinership ultimately failed and a receiver was appointed.

The receiver had argued the rates sought for the examinership were too high and asked the court to reduce them. The fees ranged from €560 per hour at the partner level in KPMG down to €100 per hour for a trainee accountant.

Yesterday, Mr Justice Frank Clarke said, having regard to previous cases and other factors and even where large insolvency firms were involved, it was inappropriate to allow a rate of more than €375 per hour for the most senior person in the firm.

He cut the top hourly rate of €560 to €375 and also applied proportionate cuts for others in the firm who were involved in the examinership. He directed hourly rates of €300 for an associate director, €260 for a manager, €200 for a senior accountant and €80 for a trainee accountant.

While the “charge-out” rates were not the same as what was actually paid to the individuals involved and there may be legitimate factors leading to the charging of different rates by different insolvency firms, the court was under a duty to carefully scrutinise examiners’ costs as they ultimately would be paid by those owed money by the insolvent company, he said.

He considered recent cases which dealt with examiners’ fees, particularly that of the insolvent private members club Residence in which the fees were cut across the board by 16 per cent by Mr Justice Peter Kelly.

Mr Justice Clarke also took account of a recent judgment concerning the Thomas Read group of pubs delivered by Ms Justice Finlay Geoghegan. She ruled reasonable remuneration for examiners must be determined not just according to charge-out costs but should take into account the complexity, importance and value of the work involved and whether the charges are reasonable.

Mr Justice Clarke also took into account his judgment in another examinership case, that of BA Engineering, where the upper hourly fee was set at €300 and arguments that, given the insolvency situation, insolvency practitioners like KPMG do run the risk of not getting paid or getting paid less.

In failed examinerships like Capital, costs and fees are normally fixed after the failure, he noted.