Member Article

Insolvency expert welcomes government consultation proposals

GOVERNMENT proposals for new measures that would enable more rescues of viable businesses in crisis have been welcomed by one of South Yorkshire’s leading insolvency experts.

The recent collapse of high street giants BHS and Austin Reed have both highlighted the impact of major insolvency cases on the wider economy.

The government is now consulting on four proposals that would help create an enhanced structure for dealing with insolvency.

These would include creating a new moratorium - a legal authorisation to debtors to postpone payment - which would provide companies with an opportunity to consider the best approaches for rescuing a business while free from possible enforcement and legal action by creditors.

There would also be moves to make it easier for companies to continue trading through the restructuring process and also time to develop a flexible restructuring plan.

In addition there would extra reforms aimed at extending chances to explore options for rescue financing.

“Although this is very much still at the consultation stage it is good to see that the government recognises the need for an improved set of rescue deals that practitioners can use,” said Paul Moorhead, of Sheffield insolvency practice Graywoods.

“What everybody wants is to help businesses to be rescued and turned around.

“There are already a range of options available - such as company voluntary arrangements - but any move that highlights the need for a free discussion of this complex issue is one that has to be welcomed and we look forward to seeing if the consultation process can lead to any positive changes.”

This was posted in Bdaily's Members' News section by John Highfield .