Fight looms over Peregrine costs

PUBLISHED : Saturday, 03 July, 1999, 12:00am
UPDATED : Saturday, 03 July, 1999, 12:00am


PricewaterhouseCoopers is to fight an unprecedented order from a judge that an independent expert scrutinise fees charged in the Peregrine Investments liquidation.

Mrs Justice Doreen Le Pichon has sought to have the initial fees charged by provisional liquidators and the method for calculation reviewed by an independent legal-costs draftsman.

Her ruling will be challenged at the Court of Appeal on July 13 and 14, according to PricewaterhouseCoopers.

The judge's order would be breaking new ground, the first time such a ruling has been made.

The initial fees cover work carried out by the provisional liquidators and their legal advisers, solicitors Deacons and Clifford Chance.

They cover the period from the date of Peregrine's collapse until the winding-up order was made on March 18 last year - or 63 days' work.

The amount originally charged was $76 million, but Mrs Justice Le Pichon refused to accept the sum, seeking to secure a better deal for creditors.

She also expressed concern over the possibility of overmanning and on the number of billable hours achievable on a sustained basis.

She ordered that only 25 per cent be paid to the provisional liquidators, and this was further increased to 33 per cent in June last year.

An attempt to bolster this to 50 per cent was vetoed by the judge in May. She refused to make any further interim payments.

Fees of $57.2 million charged between March 18 and July 2 last year were also set aside by Mrs Justice Le Pichon.

Reversing a previous decision concerning the roles of the committees of inspection and the joint liquidators, the judge ruled that they had no power or authority over the fees.

The payments of $57.2 million were deemed not binding by the judge.

It is understood PricewaterhouseCoopers will also challenge this decision at the Court of Appeal at a later date.

About $69 million has been paid out in fees up to July last year. The judge ruled that any overpayment would have to be repaid before the liquidators' release from office.

The Official Receiver's Office is co-ordinating the judge's order concerning the legal costs draftsman.

It is understood that only an initial analysis has been performed by the independent costs experts.