Landlords vent frustrations after HMV administrators pocket millions

There were many who lost out financially when HMV toppled into administration back in January 2013, to the tune of millions of pounds. Two years on the retailer’s landlords have struck out at the lack of transparency in the administration process, after it emerged that the administrators and advisers involved pocketed £19 million in fees.

So while HMV’s administrators at Deloitte will be laughing all the way to the bank (though they are likely to see £8 million of the £11.7 million earned), landlords will be handed less than a penny in the pound. Other parties in line to receive a portion of the fees relating to HMV’s collapse include lawyers and commercial property agents.

The situation has led the British Property Federation (BPF), which takes care of the interests of the largest landlords in the UK, to vocalise concerns about the unfairness of current processes. Melanie Leech, chief executive of the BPF, said: “Without a proper system of checks and balances in place it is impossible to know if fees could have been priced more competitively, but at present, the fees charged seem to be entirely unconstrained.”

Creditors should get more information about what their money is being spent on, the costs and the chance to review and approve these costs, she continued.

Vince Cable, the secretary of state for business, is also understood to be worried about increasing charges involved in large company insolvencies.

Ms Leech refers to a ‘claw-back’ practice in the process of restructuring firms, which sees creditors who lose out paid back if the company’s finances return to the black. “We are exploring if the same principle can be applied to administrations,” she said.

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