Administration fees

By THIS IS MONEY
Updated:

 

The Daily Mail City team explain what administration fees are.

What are they?

Very hefty and earned by sharp-suited types every time a company hits the buffers. These people usually work for law, accountancy and banking firms.

What do they do?

Like Harvey Keitel's sinister character The Wolf in the movie Pulp Fiction, these guys earn their corn by cleaning up other people's mess.

In the case of companies in administration or liquidation, there is always a financial aftermath to mop up that will involve selling off all, or parts of the business in order to pay back creditors and, if they are lucky, shareholders.

Unfortunately, this almost always means workers getting the chop.

How much are they paid?

It varies, but professional advisers to failed home furnishings group Courts have run up more than £40m in fees. Administrator KPMG has collected £23.7m so far, including thousands of hours for partners who are billed at £600 an hour.

Investment bank NM Rothschild and law firm Allen & Overy banked the majority of £18.5m in other professional fees. Creditors were owed £280m, but have so far recovered £120m and are unlikely to get much more.

Most watched Money videos