Top insolvency man under investigation

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The Independent Online
The Institute of Chartered Accountants is examining allegations that Christopher Morris, one of the country's top insolvency practitioners, breached the profession's guidelines in order to win a pounds 1m-plus contract.

The professional body's inquiries relate to a legal dispute between Mr Morris, other partners at Touche Ross, and an aviation consultancy.

In High Court proceedings instituted initially in July 1989, the Kent-based Aviation Partnership claimed that the Touche Ross partnership of 1987 agreed to pay it a fee in return for being introduced as the administrator to British Air Ferries, a Southend- based air-charter company that experienced cash-flow difficulties in 1987.

Touche Ross was appointed as administrator to the company in January 1988. The writ was amended in July 1992 to include as defendants Touche Ross partners involved in the deal, including Mr Morris.

According to the amended writ, Mr Morris and his colleague, Malcolm Fillmore, agreed to pay an introduction fee of 10 per cent of the fees earned by Touche Ross plus VAT at a meeting in March 1987.

It goes on to state that throughout 1987, in accordance with this agreement, Aviation Partnership 'took active steps to encourage British Air Ferries to become an administration client' of Touche Ross.

The claim states that Touche Ross failed to inform the Aviation Partnership of the sum of the fees it earned as a result of the introduction, but that the total was 'not less than pounds 1 million'.

The rules of the Institute of Chartered Accountants prohibit the payment of referral fees for administration or insolvency work.

At the end of last year, an oral compromise was reached between the two parties whereby Touche Ross agreed to pay the Aviation Partnership pounds 147,500.

However, according to a further writ issued last December by the Aviation Partnership, Touche Ross failed to meet this payment. Michael Coleman, a solicitor from Harkavys, which acts for Aviation, said Touche Ross paid the money earlier this year without admitting liability.

Touche Ross denies that it breached any ethical guidelines in its dealings with Aviation Partnership and claims that the settlement made was for work undertaken by the consultancy firm on its behalf. Relations between the two firms 'appeared to be cordial', a spokesman said.

The institute has asked for solicitors' papers from the case so that its investigation committee can determine whether to launch a full inquiry. A spokesman said on Friday: 'The institute routinely examines any published complaint against any of its members.'

Reference to the dispute was first made in this month's Accountancy magazine, the journal published by the institute.

Douglas Llambias, a member of the investigations committee, said: 'The insolvency area is notorious for much of the malpractice that goes on, but I would hope that a major practice like Touche Ross would be above such methods.'

Mr Morris made his name with the Laker collapse in 1982, when he took on six of the world's largest airlines, suing them for a total of pounds 1bn for allegedly pricing Laker Airways out of business.

He is presently working on the collapse of BCCI and as joint administrator on Polly Peck International.

In 1984, he worked on the liquidation of Banco Ambrosiano.

(Photograph omitted)