In a letter to committee chair Frank Field, Philip Duffy, managing director of Duff and Phelps, said the firm now expected to charge £4.03m compared to the expected £3.5m detailed in the initial note to creditors in June 2016.

Field has taken issue with this, as the increase in fees comes despite an arrangement which saw FRP Advisory appoint concurrent administrators at the behest of BHS. FRP Advisory took on exclusive responsibility for investigations into Sir Philip Green, Dominic Chappell and their respective companies, fellow directors and advisors. In the case of Sir Philip and his companies, Duff & Phelps did not commence any such work.

In his response, Duffy listed further elements of the administration that had not been completed at the point BHS went into liquidation on 2 December 2016. These included the finalisation of liabilities and claims against different parties and agreeing the surrenders of leases and commercial disputes. The remaining work will be conducted by FRP Advisory as liquidators of BHS. That company’s work as concurrent administrator will cost around £800,000.

Duffy says there was ‘continued and unexpected’ dialogue with a number of parties about a possible sale, even after a closure had been announced, which added to costs, along with ‘numerous meetings’ with the concurrent administrators which added on at least £100,000.

He points out the firm’s average charge out rate was around £270, compared with a national average of £375 and the £500-plus rate used in the two biggest previous insolvencies, of Woolworths and Comet.

The correspondence also documents disagreement between Duff & Phelps and FRP Advisory about the timing of liquidation. FRP Advisory argued that creditors were better served by an earlier liquidation but this was resisted by Duff & Phelps.

A further letter being published, from the Pension Protection Fund (PPF),  concerns the £35m charge – the amount initially offered to the BHS Trustees for the pension fund  by Sir Philip Green but then withdrawn – that was forwarded to Sir Philip’s account by Duff & Phelps but then returned after ‘dialogue initiated by the concurrent administrators, FRP’ when they were appointed.

Field said: ‘The costs of the demise of BHS continue to spiral as the pensioners wait for Sir Philip Green to sort the pension fund. The PPF are already left scrabbling for a few pence in the pound from what is left of the wreckage of BHS. Meanwhile Duff and Phelps, who were appointed by Sir Philip, have left with half a million more than they expected for doing substantially less of the administration than they expected.

‘The return of the £35m paid to Arcadia by Duff & Phelps vindicates the PPF's decision to appoint administrators independent from Sir Philip. We are inquiring further into the circumstances of this transaction, which was not authorised by the co-administrator.

‘If it was such a completely standard move, as Duff & Phelps claim, one wonders why it was reversed by the co-administrators as one of their first acts upon being appointed, and why the PPF seems to take a rather different view.’

The Duff & Phelps letter regarding insolvency fees is here.

The PPF letter is here.