The Stockholm District Court has decided to reduce the administrator’s fee in the reconstruction proceedings for the Make Up Store companies

The District Court concluded that the fee invoiced by the administrator to the companies was significantly higher than what is considered reasonable. This means, as stated in the District Court’s decision, that the administrator will be required to repay the excess amount of approximately SEK 1,480,000 to the companies, which are now in bankruptcy.

Generally speaking, one of the most important qualities for a successful administrator is to enjoy trust, both from the company in reconstruction and from the creditors.

The District Court’s ability to review the administrator’s fee, which is primarily relevant in cases of unsuccessful reconstructions, is one of several tools for maintaining confidence in the reconstruction institution as a whole.

Another such additional tool is the important legislative amendments expected to enter into force on 1 July 2022. According to the legislative proposal, the requirements for who may be appointed as administrator will be tightened. Higher requirements will also be imposed to ensure that there are realistic prospects of succeeding with a reconstruction, which will hopefully reduce unnecessary and value-destroying reconstructions, while simultaneously increasing the possibility for serious reconstructions that save significant value.