If the PM ever manages to turn himself to something productive, one area where he may find bilateral political traction is in relation to changes to the insolvency laws. In short there are moves afoot to provide a means by which to protect directors of ailing businesses from claims of trading while insolvent by the appointment of a Turnaround Agent whose task it is to help the company trade out of difficulties.
This is similar to existing laws in the US known as a Chapter 11 Filing where companies in trouble file for protection against creditors for a period while they attempt to negotiate a settlement (similar to a Deed of Company Arrangement (DOCA)) or trade back to solvency. Anecdotally, among practitioners in the Insolvency business, this is aimed at cutting down on the practices of rampant fee-charging by liquidators of asset rich but cash-flow strapped businesses.
The proposal creates a new professional qualification for specialist Turnaround Consultants and it is hopeful this will prevent practices by errant Administrators that gouge asset strong businesses that find themselves unable to meet short term creditor needs. We fully support this. We have been providing funding to help companies release themselves from the grasp of avaricious Liquidators for years.
If you have a client with real property who finds themselves tied up under External Administration, please give us a call immediately. And let’s hope this government gets around to completing this worthwhile legislation.