Proposed new UK Insolvency legislation
To UK members from Alan Tilley, EACTP president
In 2015, anticipating the EU Directive that required member states to introduce pre insolvency consensual restructuring processes the UK Government undertook a review of Insolvency Law and entered into consultation with interested parties. EACTP commented on the process and an EACTP member was involved in the consultation process. By 2018 the “final draft” was ready but put on hold with all the parliamentary time dominated by legislation to leave the EU.
The key point for EACTP members was the provision for a pre insolvency moratorium under a supervisor to seek a consensual restructuring. We lobbied hard for turnaround managers to be recognised as “suitably qualified professionals” to act as supervisors but in the final draft only licensed IP’s were recognised, a result of intense lobbying by the Insolvency Practitioners and the big Accounting firms. We had raised the issue of conflict of interest between acting as a supervisor and then as appointed Insolvency Practitioner. The legislation skirted round this by prohibiting an individual IP taking both roles but not IP’s from the same firm.
As President I wrote to several MP’s and ministers on April 8th bringing to their attention that the UK needed this legislation urgently and whilst I did not receive a response we should be pleased to see that the process has gained momentum and new legislation is expected in the coming two months.
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