Party is over for Elton's fixer

A party organiser to the stars has been made bankrupt after being accused by one of his wealthiest clients of cheating over the bill.

Matthew James arranged events for such celebrities as Sir Elton John, Kevin Spacey, Elvis Costello and Stella McCartney. But his glittering business collapsed after he lost a High Court battle over the fees for a party he organised for one of Britain's richest men, property tycoon Rafi Manoukian.

Mr Manoukian withheld the final £200,000 instalment of the £825,000 bill for the party at Sir Elton's home, unhappy with aspects of the service and angry that Mr James was making a further £50,000 in commission from suppliers. DNA Productions sued to recover the money but found itself on the losing end of a costly High Court battle, which ended last year.

This week, Mr James was declared bankrupt, unable to pay Mr Manoukian's legal costs of about £450,000. DNA Productions (Europe) has also been wound up. At his home in Earl's Court, Mr James today said: "I am no cheat. It's a complicated matter."

Mr James, 33, a former drama student, made his name organising Sir Elton's White Tie and Tiara Ball, held annually at the pop star's home in Windsor. These events were increasingly outlandish. At one, he recreated a scene from an 18th-century French painting during which staff wore powdered wigs. Mr James even introduced zebras and giraffes at a safari-themed party.

For Spacey, he designed an airport lounge to celebrate the Hollywood actor's tenure at the Old Vic. He also arranged Stella McCartney's wedding and a party to celebrate the first anniversary of her fashion shop. Other celebrities who had sung his company's praises included P Diddy, George Michael and the Duchess of York.

But Mr James, who set up his business 10 years ago, came unstuck over Mr Manoukian's party in December 2006. The Armenian businessman, said to be worth up to £250 million, and his wife Jo, 35, a former model, hired DNA to stage a joint celebration for his 50th birthday and the christening of their daughter Fimi, now aged four. The party was a typically extravagant affair. The 200 guests included the couple's close friends David and Victoria Beckham, Elizabeth Hurley, Gordon Ramsay and Elle Macpherson. They drank Dom Perignon champagne, ate chocolates served in chocolate "glass slippers" and danced on a floor made out of mirrors.

The court effectively ruled that DNA had grossly overcharged Mr Manoukian and had routinely concealed the true costs of events to other clients. MrJames said: "The party seemed to go very well. It was only afterwards he said he was upset with some of it."

He added: "People's perceptions of me are always very over-glorified. We were not some super-slick outfit. We had stumbled into it. People like Sir Elton were not my friends. They were my clients."

Mr James's legal case was not helped by an email, accidentally sent to Mr Manoukian, which revealed how he hid costs from his clients. The email, meant for a supplier, said: "When you do quote, could you also just include 10 per cent commission to us hidden in the quote? We have to show the client our invoices which is why we need the written quote and also the commission included."

Mr Justice Evans-Lombe said: "Matthew James accepted it was DNA's practice to conceal from its clients that it was receiving commissions or discounts in addition to an event management fee." DNA went into voluntary liquidation last year. It was £200,000 short on the party, and owed about £100,000 to its own lawyers and about £450,000 for Mr Manoukian's costs. On Monday in the High Court, Mr Manoukian had Mr James made personally bankrupt too.

A source close to the case said today: "Matthew James was double-dipping. He got caught out and has gone bust. He has got just what he deserved."