In a recent application for an increase in liquidators' fees in accordance with Practice Direction 3 of 2015 (which permits the liquidator to appear in person before the Court without the involvement of advocates), the Royal Court of Guernsey issued guidance to insolvency practitioners regarding the scope and form of the information with which the court would expect to be provided upon such applications, so as to assist parties in the future. This judgment note identified the following points:
1. The Court's function on such applications, concerning the supervision of liquidators' fees, is an oversight and scrutiny function, exercised in the interests of the creditors of the Company. The Court, and in particular the Jurats, will therefore wish to keep abreast of the progress of the liquidation and the fees being charged by the liquidator(s), and to satisfy themselves that those fees, and the future fees for which authorisation is sought, are being reasonably incurred having regard to the complexity and the present state of the liquidation, and to its future anticipated conduct and prospects.
2. The information supplied does not need to be provided in minute detail, but more in the form of an "executive summary" containing sufficient detail so as to enable the Court to understand the status of the liquidation, reasonableness and cost effectiveness of the increase application.
3. An Estimated Statement of the Company's Affairs should be included, together with a list of the Company's creditors and the amount of their claims, with appropriate explanatory notes where applicable. This should also include an estimate of the anticipated realisations within the time period in question.
4. The information supplied should include sufficient breakdown and specification of relevant, distinct aspects of the liquidation work in order to enable the Court to easily identify and understand the work which is intended to be carried out under the fee allowance that is being applied for.
5. Any contingencies should be clearly identified and explained.
6. The Court may wish to see that creditors have been informed of the request for increased fee authorisation, including an update on the progress of the liquidation.
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