Examiner's fee 'unacceptable'
Judge concerned at €425 hourly rate charged to insolvent club
AN examiner's €425-an-hour fee for investigating viability options for the insolvent private members' club, Residence, was not acceptable in this economic climate, a High Court judge said yesterday.
Jim Stafford, of Friel Stafford Corporate Recovery, would earn €884,000 a year if he worked a 40-hour week based on the €425 hourly rate that he had charged for 56 hours he put into working as interim examiner, Mr Justice Peter Kelly said.
The club at St Stephen's Green, Dublin, owned by restaurateur brothers Simon and Christian Stokes, went into receivership on January 20, having lost court protection the previous week.
Mr Justice Kelly adjourned an application by Mr Stafford for total costs of €61,857, plus €50,000 legal costs, for the examinership period after counsel for the examiner said he was prepared to furnish further information on the costs.
The judge said he was "greatly concerned" at the bill, which had been provided for what was a "relatively small" and straightforward examinership of a "small company" lasting just 12 working days. A €425-an-hour fee may be what Mr Stafford charged and it "might have been acceptable two or three years ago" but not in the current economic climate, he added.
He also questioned why there were five people, including Mr Stafford, involved in an examinership that the High Court had not granted any special powers over the day-to-day running of the club when it approved a period of court protection on January 5.
The management had been left to the Stokes brothers, directors of the club's holding company Missford, the judge said.
Two of those other five people in Mr Stafford's office, supervisor Jonathan Foley, and a senior in the firm, Andrew Hendrick, had their work for the examinership of 47.75 hours and 91.25 hours billed at €210 an hour and €185 an hour respectively, the judge said.
If they were to work 40-hour weeks at those rates, their annual salaries would be €436,800 and €189,000 respectively.
"How could there have been that much work on this? I am finding it very difficult to accept," the judge said.
He could have understood it if the examiner had been put in charge of management of the club, but this was not what he was appointed to do. The judge also questioned the €50,000 legal bill for lawyers who represented the examiner during the three days the matter was before the court. He said he would require further information before giving his decision on the costs application.
Brian Kennedy, for Mr Stafford, said they would be willing to do so but asked for a two-week adjournment, which the judge granted.
When dealing with the examinership application last month, Mr Justice Kelly strongly criticised the Stokes brothers' management, particularly the fact they traded using employees' tax money owed to Revenue.
The judge described this as "a form of thieving" and he referred his judgment and papers in the case to the Director of Corporate Enforcement.