The cost of the administration of failed stockbroker Pritchard has now hit £6.2 million, double the £3.1 million shortfall identified, and the hourly fees paid to the administrators could be set to rise.
In the latest half-yearly update, covering the period from 1 March to 31 August, the special administrators Mazars revealed that it has now applied to the Financial Conduct Authority (FCA) for a time bar on further claims.
If the regulator approves this, it would still need to get court authorisation, but would at least provide an end in sight for the process.
In the meantime, Mazars said its fees rose by an additional £163,671 over the six months, based on 569 hours of work carried out at an average rate of £288. This was up from an average hourly rate of £251 in the six months prior and £248 since the special administration began in 2012.
The fees charged vary depending on the seniority of the staff member doing the work, but the company said its fees overall are due an annual review and ‘may increase’.
Part of that work has been the ongoing efforts to get in touch with clients who have not yet claimed for their losses. Mazars has been able to identify 99% of the clients with claims over the Financial Services Compensation Scheme’s £50,000 compensation threshold, which removes one hurdle for the time bar.
However, 2,488 clients with claims totalling £0.9 million have either not yet applied or agreed terms.
‘If a client does not submit a client money claim before the bar date, the modification and court order will allow the special administrators to distribute the remaining money in the client money pool without further reference to the interests of those clients, who lose any right to participate in the client money pool,’ the special administrators said.
‘It is therefore imperative that any client who considers that they may be owed money by the company, but has not yet submitted or agreed a money claim, contacts the special administrators as a matter of urgency.’
Over the period, Mazars settled further claims of £74,436, paying out £37,218 to clients, taking the total up to £25.7 million. The administrator still expects a final pay out of 3-5p in the pound, following on from the 50p already paid.
Mazars added that it is still dealing with a ‘significant potential claim’, but reiterated its belief that it ‘doesn’t have merit’.