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A Creditors guide to liquidation fees

When a company goes into liquidation the costs of the proceedings are usually paid out of assets. This guide is intended to help creditors be aware of their rights to approve and monitor fees and explains the basis on which fees are fixed.

Fixing the Liquidator’s fees

The basis for fixing the liquidator’s remuneration is set out in Rules 4.123 – 4.127B of the Insolvency Rules 2986. The rules state that the remuneration shall be fixed either:

  • As a percentage of the value of the assets which are realized distributed or both
  • By reference to the time properly given by the liquidator and his staff in attending to matters arising in the liquidation.
  • As a set amount for insolvency practitioner appointments after 1st October 2015 the liquidator must give a proposed estimate of the likely costs and fees. Liquidator’s fees will be capped unless the creditors agree otherwise.


It is for the liquidation committee (if there is one) to determine on which of these bases the remuneration is to be fixed, and if it is to be fixed as a percentage, to fix the percentage to be applied. Rule 4.127 says that in arriving at its decision the committee shall have regard to the following matters:


  • The complexity (or otherwise) of the case.
  • Any respect in which, I connection with the winding up, there falls on the insolvency practitioner (as liquidator) any responsibility of an exceptional kind of degree.
  • The effectiveness with which the insolvency practitioner appears to be carrying out, or to have carried out, his duties as a liquidator.
  • The value and nature of the assets with which the liquidator has to deal with.


If there is no liquidation committee, or the committee does not make the requisite determination, the liquidator’s remuneration may be fixed by a resolution of a meeting of creditors. The creditors take account of the same matters at the meeting which appoints the liquidator. If the remuneration is not fixed in any of these ways, it will be in accordance with a scale set in compulsory liquidation and court in voluntary liquidation.


To arrange a meeting to discuss liquidation or your company’s situation call us on: 01527 839920 or email us on:

Added: 20 Oct 2016 10:27

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The Timothy James Partnership

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Insolvency Practitioners Association
About Us

We are an independent firm of specialist Licensed Insolvency Practitioners located in Bromsgrove, Worcestershire.

At The Timothy James Partnership, we work very closely with local businesses and professionals, providing guidance on formal insolvency procedures and advice on restructuring businesses.

We recognise that at times, companies find themselves in difficult financial circumstances and our aim is to provide practical solutions in these situations.