A liquidator asks creditors to approve fees for work not yet completed
Assess a liquidator’s request for estimated future remuneration by identifying work scope, period, calculation and creditor impact, distinguishing approval from work already performed.
Corporate Recovery Partners
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The proposal includes work still to come
You receive a request to approve a liquidator's remuneration and notice that part concerns future work. Read the proposal carefully before deciding how to respond. Identify what work the estimate covers and the period or milestone attached to it. Do not assume every requested dollar has already been incurred, or that the estimate necessarily covers the entire remaining liquidation.
Find the sections dealing with work performed and work expected. Note the calculation basis and any limit or further approval described. If the report combines amounts in a way you cannot follow, ask the liquidator for clarification. Keep the question specific so the response can explain which tasks and period each figure relates to.
ASIC says liquidators can seek approval for estimated future fees and must provide information to help creditors assess reasonableness. Examine the task description, calculation and likely effect on creditor payments. This does not mean a large estimate is automatically unreasonable or that a small estimate is necessarily adequate. The work and circumstances need to be understood together.
Imagine a proposal covering asset realisation up to a particular date, with later investigation work left outside the estimate. Treating the amount as a fixed price for the whole liquidation would misread it. Ask what remains outside the request and how any later proposal would be explained. The example illustrates a scope question rather than a preferred vote.
Ask how unresolved matters could change the estimated work, without demanding a guarantee about events the practitioner cannot yet know. Distinguish necessary uncertainty from missing explanation. If concerns remain, seek independent advice about your rights and the available review process. Do not assume sending questions extends the response date stated in the proposal.
Retain the report, clarifications and your decision, following the actual voting or response instructions. The objective is to assess the defined future work on the information available. Fee approval should not be based solely on dissatisfaction with the company's failure or on a belief that every estimate is an invoice for work already done.
