Key point

Administrators are entitled to remuneration for the full period of office even where work is carried out outside of the scope set out in proposals agreed by creditors

Facts

The creditors' committee refused to sanction part of the administrators' remuneration as the committee asserted that it did not envisage that the administration would continue as long as it did (the approved proposals envisaged the company would go into liquidation after 6 months) and nor did the proposals envisage that the administrators would carry out as much work as they had (e.g. some of the investigation work should have been carried out in liquidation, as envisaged in the proposals). 

The administrators applied to court under rule 2.106 of the Insolvency Rules 1986 for an order fixing their remuneration. 

Decision

Mr Registrar Jones decided that whilst the creditors' committee's views should be taken into account, it is ultimately up to the administrators to decide how the administration should be conducted.The administrators should be remunerated for their full period of office (but the court does not have the power to fix remuneration for work done after the end of the administration, e.g. where time is spent assisting liquidators).  

Comment

Whilst it is ultimately up to the administrators to decide how to conduct an administration, the views of the creditors (or committee) should be taken into account. If work is deemed necessary which is outside of the scope of the original proposals agreed by the creditors, it may be worth updating the proposals and obtaining fresh creditor or court approval to avoid difficulties with remuneration at a later date. 

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