Blood Sweat And Fees

By: Alyson Reilly and Samantha Wood Published in: INSOL World – Fourth Quarter 2013

Offshore centres, particularly in the Caribbean, have seen a number of large, high-profile, cross- border insolvencies.  With these comes a corresponding focus on the professional fees of practitioners charged with safeguarding and overseeing the affairs of the estate.  As transparency becomes not just a buzz word, but a goal of greater global regulation of financial advisors and the professionals entrusted with the care of financial assets, is not surprising that insolvency practitioners are also facing significant scrutiny of and pressure on their professional fees and out of pocket expenses.

Who reviews insolvency fees?

In the Cayman Islands, the requirements for approval of liquidators’ remuneration and approved rates are set out in Parts III and IV of the Insolvency Practitioners Regulations 2008 (“the Regulations”).  According to the Regulations, an official liquidator is not entitled to receive remuneration out of the assets of a company in provisional or official liquidation without prior approval of the Court.  However, an official liquidator may receive payment on account of up to 80% of their remuneration before seeking approval from the Court of all remuneration.  The approval of the Liquidation Committee (“LC”) must be sought before applying to Court. Click here to read more.