KPMG applies to extend Cobbetts administration period by six months

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  • Another illustration (as if one were needed) of what a rip-off insolvency practice is. KPMG were charging at an AVERAGE rate of £361.

    IP's are notorious for charging out people that would not normally be considered fee-earners, such as secretaries. As this grunt work is probably charged at around £100 per hour to achieve an average figure of £361 means that a fair proportion of the work must have been charged at much higher rates than that.

    It's KPMG's Leeds office that's dealing with it. Even though overheads for accountants / IP's are considerably lower than those for solicitors I would be quite confident that there are no solicitors in Leeds that could charge anywhere near these rates as an average for work carried out.

    The vast majority of insolvency work is just routine, requiring no great degree of skill or knowledge. I would imagine that a commercial firm in Leeds undertaking work of a similar nature would, if they charged out their staff as IP's do, be lucky to average out at half this rate.

    The problem is that although such charges can and should be challenged the IP's know that no individual creditor is going to undertake the job when even if they're successful (as I'm sure they would be) in getting the fees reduced they receive no more benefit from the reduction than any other creditor, despite having taken all the risk and done all the work.

    I am currently working on a submission paper that in essence gives any successful challenger to the costs of an insolvency an individual `reward' based on the reduction in fees obtained. I would hope that this might at last encourage some discipline to be applied to what is at moment a licence to print money at the expense of the creditors.

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  • Well put Anonymous. A number of friends pointed me to this comment as the kind of thing I say. This is flattering because you have hit the nail on the head.

    Keep going with your submission because there are a few of us in the insolvency industry who think it needs a great deal of cleaning up.

    If you need any help please get in touch.

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