According to a recent study, the cost of being an official liquidator can be a bit rich.
“In respect of official liquidations generally, the survey showed that on an annual basis, insolvency practitioners are required to personally fund disbursements of $1.4 million and remuneration of $47.3 million in the conduct of their roles as Official Liquidators.”
This is one of findings in a research paper titled “An Analysis of Official Liquidations In Australia”, written by Amanda Phillips of Ferrier Hodgson, Sydney, and published on 13 May 2013 via the website of the Insolvency Practitioners Association of Australia (IPAA).
More detail of the estimates on annual remuneration and disbursements for official liquidations generally is shown in this table:
|
Charge made/cost incurred (million dollars) |
Recovered from company assets (million dollars) |
Funded by Official Liquidators (million dollars) |
|
| Remuneration |
55.6 |
8.3 |
47.3 |
| Disbursements |
1.9 |
.5 |
1.4 |
Another finding is that “based on the data provided by survey respondents, the average cost to administer an official liquidation is $17,475 over an average period of 7 to 12 months.”
Ms Phillips surveyed members of the IPAA. The survey covered official liquidations which commenced during the period 1 July 2011 to 30 September 2011. The paper says that “Sixteen Official Liquidators provided data in relation to 90 matters, which represented 10% of the total national official liquidations that commenced during the period 1 July 2011 to 30 September 2011.”
In addition to remuneration the paper reports on aspects of official liquidation including the nature of a typical official liquidation, the duration of appointments, an industry analysis, the turnover & size, the dividends to unsecured creditors and funding for Official Liquidators.
Ms Phillips was the 2012 winner of a scholarship from the Terry Taylor Scholarship fund administered by the IPAA. Her 33 page paper is available in pdf format from the IPAA site by clicking HERE.