$576 an hour for administration work on failed Halifax

Administration and legal costs are adding up for investors in failed companies Halifax and CBL Corporation. Photo/Duncan Brown.

Investors in collapsed Australian derivatives trader Halifax must be wondering how much it is going to end up costing for the company to go through administration.

Ferrier Hodgson were appointed on November 27 last year and figures from the latest update show administration costs have already hit $455,499.92 in just three months.

Based on the 790.7 hours billed so far that's an average rate of $576 an hour.

The three main administrators Morgan Kelly, Phil Quinlan, and Stewart McCallum, who are partners at Ferrier Hodgson have charge out rates of A$695 on hour but fortunately have only racked up 96.7 hours between them.

But even the lowest level accountant has a charge out rate of $325 an hour.

On top of that investors will have to wear a mounting legal bill which has already hit $197,804 and is set to rise with the company headed to court to determine how investors will get paid out.

So far investors have been told there is a deficiency in the company's assets of around A$19.7 million or 9 per cent of investor funds but that is before costs are taken into account.

Halifax investors are not the only ones counting the cost of administration.

Latest accounts for failed insurer CBL Corporation show more than $4m in administrative and legal costs have been racked up since Korda Menthe's Neale Jackson and Brendon Gibson were appointed on February 23 last year.

The administrator's fees were $1.926m and expenses $99,383. But the real winners appear to have been the lawyers so far with the legal bill hitting $2.118m.

So far the existing bankers of CBL have been funding the administration as there was no money available from the company to fund it.

The liquidation hearing for CBL Corporation has been set down at the High Court for May 13. A watershed meeting will be held within 10 working days of that unless the company is put into liquidation.