Deloitte administrators have charged more than £500,000 for their work on the pre-packaged sale of RSM Tenon, the listed accounting firm which collapsed last year and was sold to Baker Tilly.
Deloitte administrators have made around £588,000 so far from Tenon's administration last August, according to the firm’s six-month progress report, dated 19 March.
This includes £378,186 for 681 of hours at an average charge out rate of £556 across all grades of staff.
The joint administrators - Matthew David Smith, Nicholas Guy Edwards and Clare Boardman - have charged £210,596, based on 399 of hours at an average of £528 across all grades of staff.
When RSM was sold to Baker Tilly in August 2013, the administrators said that among the creditors, only Lloyds bank had any chance of getting money owed by Tenon. Unsecured creditors were owed about £7m.
In July 2013, Baker Tilly made an unsolicited takeover approach but did not make a final offer.
Tenon went into administration after its bank refused to give it more credit when it was on the point of breaking its banking covenants.
The sale of Tenon’s profitable parts to Baker Tilly saved about 2,300 UK jobs but was criticised for leaving shareholders out of cash.
Baker Tilly bought Tenon for £30m. Of this £1m in cash was paid towards the firm's shares; £22m was paid to settle the bank debt; and a £7m working capital adjustment.
I’m a specialist business journalist and have a particular interest in tax and technology.
What?How on earth do they justify an hourly charge rate like that?
missed the point?
Well as one esteemed poster to this site wrote recently "you get what you pay for"
Insolvency is highly regulated with stiff personal consequences for a practitioner who may make a minor technical error that has no discernible effect to creditors. Hence more highly qualified / experienced staff doing the work.
I'm no Deloitte apologist, but I wonder if one of the smaller firms with lower rates would have achieved the same outcome?
By definition insolvency means someone doesn't get paid (and thinks it's unfair, even though they [ought to] know the rules)
- so it's more amazing that there was criticism that the shareholders received no money (they're at the back of the queue and their equity is lost first) when there are creditors of various classes going without.
Perhaps Gilbert and Sullivan's Utopia Limited ( or The Flowers of Progress) should be taught at school?
Good pointI see what you are saying but even so £500 per hour is an awful lot
Ex Tenon - Partners in Baker Tilly ....
Why have any of those associated with Tenon become partners etc. in Baker Tilly. Are the very same people who were in charge of Tenon at the time it went down; if so why are they even allowed to practice in the future, let alone allowed to be partners in another firm - reward for failure?
Baker Tilly has announced the promotion of nine Partners and 11 Directors, across a number of service lines and regions.
The move follows Baker Tilly’s acquisition of RSM Tenon in September, making the newly-merged firm the seventh largest accountancy firm in the UK with annual revenues of £350m, and over 4,000 partners and staff working across more than 50 offices.
The new promotions, which became effective from 1 October, are a combination of Baker Tilly and former RSM Tenon staff.
This just wreaks of accountants looking after their own.
It will do the profession no favours at all.
As for the ex RSM partners ploughing their trade again in Baker Tilley it is immoral and needs to be taken as a sample case by ICEAW and other bodies and examined as to whether tighter regulations are required.
I myself am ex Deloitte and indeed one senior partner is a close friend. Only last week did I discuss fees with him and this matter was discussed as he has an oversight on these matters as a compliance partner. Let me say he is horrified by the fees and would rather Deloitte not be involved as in his eyes they can be seen to be compliant with Baker Tilley agreeing to allow past RSM partners to continue in a trade which they themselves have have taken advantage of - insolvency.
Sorry but in my view fish goes rotten from the head down and those fish are now at Baker Tilley.
Average charge out across all grades £500+ and that's an average. These people are massively overpaid...truly scandalous. A monkey could do most of the legwork...shows you how greed can take over when cartels exist and nobody questions the bill. Makes bankers look respectable.