Levers J
```markdown # IN CHAMBERS IN THE GRAND COURT OF THE CAYMAN ISLANDS CAUSE NO: 496 of 2002 IN THE MATTER OF THE COMPANIES LAW (2001 SECOND REVISION) AND IN THE MATTER OF THE TRADE AND COMMERCE BANK BEFORE: The Honourable Madam Justice Levers APPEARANCES: - Mr. Simon Dickson of Quin & Hampson for the Third Official Liquidator - Mr. Kyle Broadhurst of Broadhurst Barristers for the Creditors - Mr. Guy Manning of Campbells for the Joint Official Liquidators HEARD: 8th May 2007 ## RULING Levers, J. The following applications are presently before the Court:
An application by the Third Official Liquidator ("TOL") for the approval of their fees and expenses;
An application by the Joint Official Liquidators ("JOLs") for the approved fees and expenses;
An application by JOLs for the approval of their fees and expenses;
An application by JOLs for the approval of their fees and expenses; ```
(5) An application by the Liquidation Committee for directions to determine and vary the order of priority of Broadhurst Barristers fees. At the commencement of the hearing, the parties requested the Court to adjourn the application by the Liquidation Committee for directions to determine Broadhurst Barristers fees because, by consent, it has been agreed that Broadhurst Barristers fees will stand at the same level of priority as the legal fees payable to the other parties. That leaves me to deal with the other summonses. The Joint Official Liquidators have taken out two summonses. They read as follows: The First Let all parties concerned attend before the Judge in Chambers at the Law Courts, George Town, Grand Cayman on the 8th day of May at 9:30AM on the hearing of an application by the Joint Official Liquidators of the Company for the setting and approval of their fees and expenses. The Second Let all parties concerned attend before the Judge in Chambers at the Law Courts, George Town, Grand Cayman on the 8th day of May at 9:30AM on the hearing of an application by the Joint Official Liquidators of the Company for the setting and approval of their fees and expenses. (1) to settle the terms of Madam Justice Levers' Order dated 26 September 2006; and Page 2 of 13
```markdown (2) for directions regarding the payment of the approved fees and expenses of the Joint Official Liquidators, the approved fees and expenses of the Third Official Liquidator, and all other liquidation expenses. It is my understanding that part of Summons No. 1 was to be adjourned. No. 2 was to be adjourned until the Court settled the issues raised in the summons for the approval of the fees and expenses. In this matter there is a Liquidation Committee. The Committee is comprised of attorneys who represent several creditors and the JOLs have submitted their invoices through the Committee. The Committee having reviewed it, and represented by Mr. Broadhurst at today's hearing, advised the Court that the JOLs fees have been approved in principle, save and except, for the provisional liquidation fees. Those are being reviewed. This is the reason that part of Summons No.1 is being adjourned. This is an i company and I have been instructed to proceed with the liquidation extremely carefully. I am aware of the present Practice Direction and the limited responsibility the Court has, once there is a Liquidation ``` This text is a transcription of the content visible in the image, maintaining the original structure and phrasing.
Committee formed. It is also of some concern that the Liquidators have not endeavored to maintain the fee structure of a less than market value, in view of the insolvency of this Company. However, guided by the recent judgment of the Privy Council in these matters, once the Creditors Committee has approved the fees, it is my view that it is not for this Court to step in to the Liquidation Committee's issues and act as a taxing master. In those circumstances, the fees approved by the liquidation committee are approved by the Court. To date that is some $1,888,107.62 and expenses in the sum of $210,186.33. I adjourn the question of the provisional liquidation fees and expenses and legal fees for the parties to attempt a settlement. There is another summons taken out by the JOLs for approval of an asset recovery agreement between the Company and a law firm in Argentine with the costs of the application be paid from the assets of the Company. I foresee certain conflicts of interest in this matter.
Liquidation Committee by Mr. Kyle Broadhurst, attorney acting as an advisory to the Creditors and to advise the Court if a resolution in writing is available from the Committee giving their approval of this agreement. The Court also required an estimate of the JOLs fees for this matter which should be capped, and on receipt of all that information the Court should review the application. In the event that this matter does come before the Court without agreement with the Liquidation Committee, it must be borne in mind that the party to the agreement who is on the Liquidation Committee should not vote in any resolution to be passed. That now leaves the question of the JOLs application for the payment of approved fees and expenses. As the matter is complicated by the fact of insolvency the parties wish to address me on that aspect and for purposes of this Ruling no decision will be made on that aspect of the application. Before I go Third Officer should be dealt with, Mr. Broadhurst has received a letter from Moyano Rodriguez & Associates; a firm that apparently
```html 1 has some involvement with the Trade and Commerce matter. He has 2 written to Mr. Broadhurst and the allegations made therein are quite 3 serious. The Court is entitled to be apprised by all the objectors. In 4 making this decision I bear in mind that every individual creditor could 5 object and the matter could be prolonged eternally. However, the 6 Court has a discretion as to whether it should hear from a party. In 7 view of the contents of the letter I am of the opinion that the Court 8 should invite this attorney-at-law who represents interests in this 9 matter to make representations officially in writing to the Court or 10 instruct local attorneys to appear on his behalf or appear on his 11 behalf himself. 12 13 The Cayman law is that a liquidation involves the appointment of a 14 liquidator whose function it is to act as the agent of the company and 15 to realize the companies assets, to identify the companies creditors 16 and the amounts of their claim and to distribute the proceeds etc. 17 The duty of a liquidator is to maximize the realization of the 18 assets, which were ignored. The Court, in those circumstances, ```
```html 1 cannot turn a blind eye to this letter. This is a substantial complaint 2 and the Court must give it some attention. The Clerk of the Court will 3 be so directed to write to the attorney in question. 4 5 I now turn to the question of the Third Liquidator's fees. There is 6 before me, presented by Mr. Broadhurst, a submission on behalf of 7 Liquidation Committee raising some concerns. They are as follows: 8 9 The value of the work completed 10 12 They seek the review of the fees incurred prior to August 2006 on the 13 basis that little was accomplished by the Third Official Liquidator in 14 this matter to justify the fees claimed. They apparently have 15 concerns, as a result of what they perceive to be lost opportunities to 16 advance claims and further concerns that the payment to the Third 17 Official Liquidator has brought in no value to the liquidation estate. 18 19 use Thy rates for Stairly rates for the support staff 20 21 Mr. Broadhurst submits that their concern is that the work was done 22 by a partner and a manager as opposed to support staff. The ```
The concern also includes the significant administrative charges that are being charged. They also object to the payment of fees for applications to approve fees. The Committee also questions the amount of money that has been sent in disagreements and disputes between the Joint Official Liquidators and the Third Official Liquidator. These are, of course, concerns that need to be expressed to the Court and the Court must weigh it in the balance. The position in this matter is that the Third Official Liquidator was given a very restricted mandate to pursue a claim against a particular party. The Third Official Liquidator and the Joint Official Liquidators apparently from inception did not see eye to eye. The Court intends to review each objection individually, but just as a general background to this review, it must be remembered that it is not always at the inception of a liquidation that the fruits of the labour can be seen immediately. The Court must treat the Joint Official Liquidators and the Third Official Liquidator equally. There should be parity between the two. The Committee must see that the costs and expenses involved now that the liquidation is nearing its end are becoming uneconomic and especially as a matter of principle the fees
```html 1 to be paid to all parties (that is the JOLs and the Third Official ( Liquidator) must be at market value. 3 4 Mr. Simon Dickson on behalf of the Third Official Liquidator submits 5 that these objections have no proper intellectual basis. The 6 Committee's desire to investigate the fees is costing more money 7 than necessary, he submits and that the Committee has since 8 December of 2006 had time to review the files which have been 9 opened for inspection at all times to them and they have not done so. 10 He urges the Court to review these objections against that ( background. 12 13 The value of the work completed is the first objection 14 15 Mr. Dickson responds that it cannot be quantified, in terms of the 16 value of the work done being assed by the value of it to the estate. 17 This is an eight hundred and eighty two million dollar lawsuit against 18 Arerson. Itremely... and that in these circumstances investigations, and the instructions could only be done or given by a ( ``` ```latex \text{Page 9 of 13} ```
```html 1 senior partner. Regrettably, it would appear that the Liquidation ( 2 Committee sat back and allowed these negotiations and work to be 3 undertaken whilst being invoiced. It would appear that it is now an 4 impossible task to quantify the value of the work done and the 5 necessity for the work done, when in fact a lawsuit has been 6 launched based on the work undertaken by the TOL. The statute of 7 limitation has been met (7 October 2006) in the face of a lot of 8 adversity from both the Joint Official Liquidators and the Liquidation 9 Committee. The Committee was formed in October 2004 and nothing 10 has been said about the value of the work invoiced till now. ( 11 12 The use of and the rates for the support staff 13 14 The above comments as to the difficulty of negotiations, the necessity 15 for instructions to be given by a partner and the requirement for a lot 16 of investigative work to be done is Mr. Dickson’s response to the 17 hourly rate and the support staff. The administrative charges may 18 appear to be high with the view of these charges now being invoiced. This is bearing in mind that this is an insolvent estate. It ( 19 revenue charges may well object to the amount 20 invoiced. This is bearing in mind that this is an insolvent estate. It ``` Page 10 of 13
may be that those charges are negotiable between the parties. At
this stage I would not order a review but I would order a discussion
between the parties as to those charges of $19,448.50. The fees to be paid for these applications The Privy Council's decisions as to liquidator's fees has made it quite clear that these fees are to be paid and I have nothing further to add to that. Their fees are approved. The dispute between the JOLs and the Third Official Liquidator This was a fact and I do not believe that one party alone is to blame. The JOLs refused to give the $75,000 that was required to commence proceedings, the Liquidation Committee did not step in and approve the fees or resolve the dispute. Should this lawsuit be successful, the liquidation stands to gain substantial sums of money. The JOLs In paid for Therefore, that all the Third Official Liquidators fees are in, I have been time fifth affidavit of the TOL at CDJ5/2(3) and the sixth affidavit of the Page 11 of 13
```html 1 TOL at CDJ6/3 are approved save and except for US$19， 448.50 for 2 the support staff which should be the subject of discussion with a 3 view to a reduction. 4 5 I also rule that the fees for Diamond McCarthy Taylor Finley Bryant & 6 Lee LLP and Quin & Hampson for the sums claimed in paragraph 8 7 of the affidavit is approved. 8 9 Finally， I would like to state that the Liquidators must be careful that 10 they do not involve the liquidation in any further legal expenses， by 11 negotiating with persons who might have a conflict of interest and 12 thereby invite lawsuits from creditors. It is clear that the gentleman 13 with whom an agreement has been signed could be said to have a 14 conflict of interest between his duty to his clients (the creditors) and 15 the estate in the event of a dispute. In those circumstances steps 16 should be taken extremely carefully to ensure that he does not vote 17 on resolutions in which he has an interest and that all the creditors 18 are informed of the problems that could arise. 19 Costs of all the applications to be paid out of the assets recovered. ``` This is a transcription of the page, using Markdown for headings and paragraph structure, HTML for tables, and LaTeX for math. The content is faithfully transcribed from the image provided.
```html 1 2 Dated this 11 th day of May 2007 3 4 Judge of the Grand Court ``` ```latex \documentclass{article} \usepackage{amsmath} \usepackage{graphicx} \section{Dated this 11\textsuperscript{th} day of May 2007} \section{Judge of the Grand Court} \begin{figure}[h] \centering \includegraphics[width=0.5\textwidth]{grand-court-seal} \caption{Grand Court Seal} \end{figure} \section{Page 13 of 13}