In the matter of Spencer Dock Development Company (in Liquidation) and the Companies Acts 1963 to 2012 (Approved)

                  This case considers whether fees incurred as part of a liquidation should be approved by a court, where they are payable, not just to the official liquidator but also, to a company in which the official liquidator has an interest.

                  This Court has concluded that such an approach to fees in a liquidation is not best practice since it suffers from a lack of transparency, particularly when one bears in mind the position of unavoidable conflict of interest occupied by a liquidator in seeking payment for his fees, which payment will inevitably reduce the amount due to the creditors. Accordingly, this Court refused to approve the payment of the fees to such a company in this case.

                  The role of liquidator is one of considerable trust because liquidators are expected to recover, in as cost-efficient a manner as possible, as much money as possible for the creditors of an insolvent company, who are inevitably going to be out of pocket.

                  In addition, there will be a tension in every liquidation regarding liquidators� fees, because every euro that is paid to the liquidator in remuneration (and to his lawyers in legal costs) will lead to one euro less being paid to the creditors.

                  In all of this, a liquidator is placed in an unavoidable conflict of interest position since he is deciding on the work that he should undertake in the liquidation (and thus generating income for himself) and then deciding on the amount he should be paid for that work, without any oversight from directors, as the company is in liquidation.