What Would you Like to do about the liquidator ?

Creditors have the opportunity to approve an application to court for the replacement of the current provisional liquidators, PwC, as part of the process for the first creditors’ meeting.

DST has been investigating the options open to creditors. These are as follows:

(a) leave PwC in place and effectively approve their appointment as liquidators; or

(b) appoint a “conflict” liquidator to work alongside PwC. A “conflict” liquidator is appointed alongside the current joint liquidators as another joint liquidator. A conflict liquidator deals with specific issues that are agreed with the creditors’ committee. These would typically include investigations where the incumbent liquidator is perceived to have, or potentially have, a conflict of interest or where the creditors’ committee elects to have the conflict liquidator pursue other specified claims, such as contentious issues or forensic accountancy. DST's understanding is that this would not necessarily lead to an increase in costs as the scope of work for each firm would ensure that there was as little duplication of roles between the two firms involved as possible; or

(c) replace PwC. This is likely to be contentious to implement and would almost certainly involve a higher level of costs initially as the replacement liquidator would need to get up to speed on all of the issues relating to KSFIOM and handle the handover of intellectual property. It would however mean that the liquidator was one that was chosen by creditors.

DST understands that the hourly charge-out rates for a conflict liquidator and a replacement liquidator will be less than PwC’s, which are high (in keeping with their “Big Four” status). The indications DST has received after meetings with alternative accountancy firms are that the charge-out rates for the conflict liquidator and a replacement liquidator would be in the region of 20-30% less than PwC’s.

The candidates for the role of conflict liquidator and the liquidator are in the top ten UK accountancy firms. The conflict liquidator would be based in London; the replacement liquidator would be run in a similar way to PwC, with a representative both in London and on the Isle of Man.

Each option has certain advantages and disadvantages associated with it and DST wish to canvas DAG for its preferred solution. Please choose which option you would prefer DST to pursue on your behalf.

Please cast you vote in the new poll to indicate which of the three options is favourable to you.

Dag Strategy Team.