Who says that everyone loses in bankruptcy?
In less than three months of work as Special Administrator on the Alpari UK insolvency, bankruptcy specialist KPMG has reported that it has already rung up fees of more than £4 million ($6 million) to come out of client funds.
KPMG’s fees are charged as a function of the amount of time it spends on the file – the more time spent, the more KPMG charges. And the fees are piling up, we understand from previous filings, at a rate approaching £500 ($750) per hour.
Nice work if you can get it.
KPMG reports that when all is said and done on the Alpari UK file, it expects to charge somewhere between $7-8 million in fees. In addition to KPMG’s special administrator fees, KPMG has approved between $1.3-1.6 million in lawyers fees on the insolvency. Adding in wages paid to retained Alpari UK clients and other infrastructure costs, fees charged to Alpari UK will total $12-14 million – representing more than 10% of the value of client funds of just under $100 million at Alpari UK as at January 15.
The good news for Alpari UK clients? Any money haircut from these fees can be recouped in full from the FSCS, although only up to a maximum of £50,000 per client. Clients who had more than £50,000 on deposit will likely take at least a small hit, and will not get all their money back.
KPMG yesterday released more information on the valuation of trades for those Alpari UK clients who had open positions involving Swiss Franc CHF pairs.