Administrators’ remuneration—value is more important than time

Administrators’ remuneration—value is more important than time

How will the courts assess remuneration costs for administrators? Frances Coulson of Moon Beever considers the Companies Court’s decision in RE Brilliant Independent Media Specialists Ltd.

Original news

Re Brilliant Independent Media Specialists Ltd [2014] Lexis Citation 201, [2014] All ER (D) 111 (Oct)

The Chancery Division, Companies Court, considered an application by the former joint administrators of Brilliant Independent Media Specialists Ltd (In Liquidation) (the company) for the court to fix their remuneration pursuant to the Insolvency Rules 1986, SI 1986/1925, rr 2.106 and 2.108. Taking into account the outcome of the administration and the benefit achieved the court held that £233,147.25 was a fair, reasonable and proportionate sum.

What issues did this case raise?

In short, the issues were:

Issue 1

Whether and, if so, to what extent can the administrators receive remuneration for work carried out if the creditors’ committee always made clear that the company was to move into liquidation as soon as practicable and that investigatory work in particular was to be carried out by the liquidators?

Issue 2

Whether remuneration should be fixed for work which:

  1. fell outside the parameters of the proposals per se, and
  2. especially if it was carried out after 31 May 2012 notwithstanding the proposals provided that ‘the Company will move from administration to liquidation within 6 months of the commencement of the administration, or at such earlier time that in the opinion of the joint administrators the purpose of the administration has been achieved’

Issue 3

Whether remuneration can be fixed for work during the period after cessation of the administrators’ appointment on 12 August 2012 when the company had been placed into creditors’ voluntary liquidation and the liquidators requested those services.

Issue 4

Whether the joint administrators could justify the remuneration claimed applying the Insolvency Rules 1986, r 2.106 and the Practice Direction: Insolvency Proceedings [2012] BCC 265 (the PD), including the costs incurred in respect of the application.

The administrators relied on the

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