Professionals 'feasting on carcasses', says judge
Accountant gets €509,543 for Newbridge credit union work
A HIGH Court judge has expressed concerns about various professionals "feasting on the carcasses" of insolvent and semi-solvent companies at a time when many sectors are "taking a hit" and many people have had pay reductions.
Some professionals appeared to be getting good pickings from troubled sectors when other people who are working just as hard are getting less, Mr Justice Brian McGovern said.
He made the comments after approving "a very large figure" of €509,543, fees, plus outlay and VAT making a total of €647,382. The money was sought by accountant Luke Charleton of Ernst & Young for five months' work he has done since being appointed last January as special manager to Newbridge Credit Union, Kildare. Some €70,977 legal fees were also approved.
The fees cover the period January 13 to June 14, 2012. As Mr Charleton's appointment was previously extended for another six months to the end of this year, a separate application for fees for that will be made.
The fees will be paid by the 37,000 members of the credit union, whose representatives said yesterday they could not consent to such a large sum but were not opposing it. The fees are based on hourly rates descending from €375-an-hour at partner level.
The level of fees, the court heard, was agreed to by the Central Bank, whose counsel Brian Kennedy described Mr Charleton's work as necessary, proportionate and of a high professional standard. Mr Kennedy also noted the bank had agreed to rates last January which were higher than sought now, but those higher rates had been cut in February by the High Court.
Rossa Fanning, for Mr Charleton, said his client's work was "very significant, complex and novel" and he was the first special manager appointed under new legislation entitling the Central Bank to make such appointments when necessary.
The appointment was sought by the Central Bank with approval of the Minister for Finance arising from uncertainty about the credit union's financial position.
Mr Justice McGovern said he was told the work done was complex but he wondered was it more so than a very difficult liquidation or examinership.
Having heard the sides, the judge said he would approve the fees. While he saw "a very large figure", the Central Bank said this work was necessary and professionally done,.
He would make the order but had general concerns in a context where many sectors are taking a hit but insolvency and other professionals were feasting on the carcasses of troubled companies, the judge said.
Mr Charleton's appointment was sought in circumstances where there was said to be a lack of clarity about the financial position of the credit union.
In an affidavit, Mr Charleton said a very considerable amount has been achieved with regard to identifying issues that need to be addressed to ensure the viability of the business of the credit union.