Creditors who fiercely objected when a media company's administrators demanded almost £400,000 for their work have succeeded in reducing the bill by more than a third after convincing the High Court that the fees were excessive.

The administrators pointed out that their efforts had ultimately achieved a good result and that creditors had received a better return than originally expected following the company's insolvency. Arguments that they had exceeded their remit and carried out work which they were not authorised to do in large part failed.

However, the Court noted that the administrators were obliged to give an adequate account of where chargeable time had been spent and to justify their remuneration. In several respects, they had failed to do so and, in one instance, the fees charged were 'plainly disproportionate'.

The administrators were also not entitled to charge the company for additional work done after it went into liquidation. They had claimed £389,340 in fees; however, the Court fixed their remuneration at £233,147. Taking into account the outcome of the administration and the benefit achieved for creditors, that was 'a fair, reasonable and proportionate sum'.

If you have concerns regarding the issues raised above, contact Kam Majevadia on 0121 698 2200, email k.majevadia@sydneymitchell.co.uk or fill in our online enquiry form.

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