Posted 27 April 2017 By Steve Elliott, Business Recovery and Insolvency Partner
In Business Recovery & Insolvency
This month saw the biggest revision of insolvency legislation in 30 years; we (insolvency practitioners) now have to grapple with the consolidation of 313 pages and 5 schedules of the “old” rules into 444 pages and 11 schedules of “new” rules. I’m probably not the first to wonder how the Government’s aim of simplification will be achieved here but accept that we have to give them a chance. In fairness, it is no bad thing to have the various bits of legislation tacked on over the years, incorporated in a logical way – I just don’t relish the prospect of ploughing through it all!
If you, or a client, are unlucky enough to be a creditor in a liquidation now, the main thing that you will notice is that there will no longer be a creditors’ meeting by default. The directors’ choice of liquidator will be taken “as read” unless 10 creditors, or 10% of creditors by number or value, object in a very short time-scale. Meetings can be held remotely, by email, Skype etc and the Government considers that this measure alone will save £6m a year in costs. I remain sceptical on that point but we will see.
Creditors with claims less than £1,000 will have no need to “prove” their debt. It will be taken at the figure in the company’s records so that will save small businesses some time.
In all, it is a piece of legislation with good intentions, to make things simpler, cut red-tape and costs – whether it delivers, will be in the “road testing” to come!
To discuss this or anything else contact Steve Elliott on 01793 818300 or send him an email.