KPMG sues over 'unpaid' fees
KPMG launches damages claim over fees for sale of shopping centres
KPMG has launched a £1.4m damages claim in a row over the sale of two
shopping centres for £192m.
The Big Four firm says that trustees for the Ironzar Trust, which owned three
shopping centres, failed to pay its fees for financial advice over plans for
sale.
And because the trustees then sold two shopping centres to British Land
without using KPMG, the firm lost commission of about £1.4 million on the sale,
according to a High Court writ.
Now KPMG is suing the trustees – Equity Trust (Jersey) for damages, as well
as for fees of £25,000 and £50,000 and expenses of £15,955.
The trustees engaged the firm to provide financial advice over plans to sell
the Merseyway Shopping Centre in Stockport, and the Queensmere Shopping Centre
and the Observatory Shopping Centre, both in Slough.
KPMG says it agreed a fee of £25,000 for a project feasibility study, and was
entitled to a £50,000 fee if the project was aborted, and that its offshoot KPMG
Corporate Finance would be the sole selling agent for the scheme.
But the Ironzar Trust decided to abort the scheme in June 2004 and appointed
Buckingham Securities Holdings, before KPMG had provided management proposals
and an information park, the writ says.
The trust decided to sell the two Slough shopping centres directly rather
than by selling the interests in a co-owned or collective investment vehicle,
the court will hear.
If the trust had not breached the letter of engagement, KPMG would have acted
as selling agents and would have achieved a sale of the centres to British Land
or another purchaser for a price at least as high as the £192m paid by British
Land, the writ says.
KPMG says it has lost commission of £1.4m on the sale and accepts that if it
had been involved in the sale, it would not have received the termination fee of
£50,000.
Despite requests for payment, the Ironzar Trust has refused to pay the fees
of £25,000, £50,000, or to reimburse expenses of £15,955, and has not paid a
penny for its wrongful repudiation of the selling agency appointment, the writ
says.
