Judgment reserved on €425 hourly charge for examiner

A HIGH Court judge has reserved judgment on whether to approve fees sought by an examiner who investigated the viability of the insolvent Residence private members’ club in Dublin. Examiner Jim Stafford’s fees were based on an hourly charge of €425.

The club at St Stephen’s Green, owned by restaurateur brothers Simon and Christian Stokes, went into receivership on January 20th after Mr Justice Peter Kelly refused to continue court protection for it.

The judge strongly criticised the Stokes brothers’ management, particularly the fact that it traded using employees’ tax monies owed to the Revenue. Describing that as “a form of thieving”, he referred his judgment and papers in the case to the Director of Corporate Enforcement.

Mr Justice Kelly later queried whether a bill of more than €111,000, made up of €61,857 examinership costs and €50,000 legal costs – related to three court appearances – was acceptable in this economic climate. Yesterday, the judge was provided with further documents outlining the basis of the charges and heard legal submissions.

Brian Kennedy, for Mr Stafford, of Friel Stafford Corporate Recovery, said the €425 an hour fee was fixed three years ago and was still accepted. Mr Stafford charged a discounted fee of €390 an hour when doing work for the Revenue and other State bodies, he added.

Mr Stafford had rounded the number of hours worked in the Residence examinership, 60 hours, down to 56 which effectively left a fee of €396 per hour and had incurred significant overheads as detailed in documents.

Counsel said Mr Stafford does a certain amount of unpaid work and was not receiving a €425 per hour fee for every hour in the working week.

This was in some ways a “non-routine examinership” due to factors including a lack of financial controls in the club and a substantial Revenue liability. Several issues had arisen, including issues relating to credit cards and payments to staff which, if left unresolved, would have had significant implications for the company, counsel added.

Mr Justice Kelly said many other professionals, including lawyers, architects and engineers had reduced their fees. “Nothing is as it was three years ago,” he added.

Mr Kennedy agreed but suggested there was perhaps not the same downward pressure on the fees of insolvency experts who, he said, are very busy now.

Alison Keirse, for the Revenue, said legal fees for work done for the Revenue had fallen by 8 per cent. Mr Justice Kelly remarked that the examiner appeared to have become very involved in monitoring this company and asked would it not have been more appropriate to apply to the court not to have the management left in place.

Mr Kennedy said the examiner acted to reduce costs and thought the best approach was to leave the management there but to carry out close monitoring, including of the cash flows.