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Huge cost of running Quinn Insurance is revealed

The joint administrators to the Quinn insurance group are seeking €565,000 for their work since taking over the running of the company in March, the High Court in Dublin heard yesterday.

And the sale of the group is not the priority “at this time” of administrators Michael McAteer and Paul McCann of Grant Thornton, the court heard.

However, they have held discussions with the group in relation to a joint approach to any proposed sale. The administrators are looking at a variety of options, including the combined sale of shareholdings of Quinn Insurance Ltd and Quinn Healthcare Ltd, sale of the business and assets of the companies and a combination of those.

They had also reached a preliminary agreement to exclude subsidiary undertakings from the process and to sell the assets/shareholdings on a debt-free basis.

The work for which the administrators are seeking costs dates from March 30 to April 30, 2010.

They also want to invoice the company monthly up to the end of July in respect of their remuneration for sums not exceeding €1.8m. They also want to pay their solicitors €120,000 for work |between March 30, and April 30 last and liberty to pay further legal costs.

They are seeking court approval to pay public relations company Hume Brophy €50,000 for work carried out between March 30, and April 30, last, plus approval |to pay the PR firm €10,000 |per month for work from May to July 2010.

Mr Justice Nicholas Kearns yesterday adjourned these costs |applications to June 3.

In a report presented to the judge yesterday, the administrators said an actuarial review had uncovered some €68m under-provision for liabilities in 2009.

Bernard Dunleavy, for the administrators, said the report also outlined unaudited financial statements had shown a €47m loss for the year to end December 2009, but many areas of the companies' business remain at pre-administration levels.

The report confirms some 902 employees are to be let go over a 12-month period with 350 to leave by July 31. The redundancies will be on a voluntary-led basis and will achieve savings of some €30m, Mr Dunleavy said.