High Court cuts administrator fees
A JUDGE has cut by 25pc the €480 per hour fees sought by the administrator of collapsed insurance company Icarom plc.
High Court president Mr Justice Nicholas Kearns also cut the average €330 hourly fees for the administrator's staff after noting "a great deal of public disquiet at the level of fees charged for this type of work".
Icarom was formerly the Insurance Corporation of Ireland plc which collapsed in the 1980s leading to an insurance levy being imposed.
The administration has lasted almost 30 years and is expected to conclude shortly. Some €10m 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 (PwC) in 2008, the Department of Finance agreed he would continue in that role with the assistance of PwC staff.
Mr Justice Kearns said today, 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 25pc.
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 had 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 Icaram, 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 the years 2011 and 2012.
The Central Bank had indicated in a letter to solicitors for the administrator this week it had no objection to the 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 the years 2010 and 2011at €480 per hour and also sought approval of fees for PwC staff involved in the administration.
Reports to the court outlined the rates charged for PwC staff in the period from 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.
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 the year 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 2011 to January 2012.
The reports outlined the work carried out included accounting and financial matters, review of Icarom deposits with banks following the Government's bank guarantee, pension issues, reporting to the financial regulator and work relating to Icarom's future strategy and run-off options.