KPMG earns £6.4m fees from Connaught collapse
KPMG defends fees earned from administration of collapsed social housing contractor
The lucrative fees available to administrators of failed businesses have been laid bare after KPMG disclosed that it has already earned £6.4m handling the collapse of Connaught, the social housing contractor.
Unsecured creditors to Connaught, including trade suppliers, were saddled with losses of £39m following the company’s collapse, the Telegraph reported.
The scale of the fees earned by the accountancy firm since Connaught’s collapse in September 2010 were detailed in documents filed at Companies House.
The fees have risen from £3.2m since KPMG last updated creditors in August last year.
The collapse of the FTSE 250 support services group was one of the biggest corporate failures of the recession, putting 10,000 jobs in jeopardy, and has led to a lengthy and complicated administration process.
A KPMG spokesman told the Telegraph: “Connaught is a large and complex insolvency. Finding 15,000 invoices in boxes at head office was the tip of the iceberg. To have negotiated two sales and rescued most of the jobs is a significant achievement in the circumstances. Our fees are paid by the secured creditors and indeed we negotiated a concession with them.”