THE government’s announcement of new tools to improve rescue opportunities for struggling companies has been welcomed by one of the region’s leading insolvency experts.
The plans include giving a breathing space to provide viable companies with more time to restructure or seek fresh investment to avoid moves by creditors.
There will also be a new mechanism to prevent suppliers terminating contracts because a company has entered an insolvency process.
And at the same time new measures are also being introduced to help ensure creditors, employees and other stakeholders are treated fairly by the directors of struggling companies.
These proposals will include fresh powers for the Insolvency Service to investigate directors of dissolved companies, enhancements to existing powers to trace hidden assets and the ability to disqualify directors of holding companies who unreasonably sell insolvent subsidiaries.
“We welcome any plans by the government that will protect companies struggling to survive in a tough trading environment but which also ensure a fair approach to both sides,” said Paul Moorhead, of leading Sheffield insolvency and business turnaround specialists Graywoods.
“It is particularly encouraging to see that the government is understanding that all some companies need is the chance to begin discussions of a rescue plan before they feel pressure from creditors.”
Paul added that the collapse in recent months of some major High Street names highlighted the fact that there was a need to review the way in which businesses are able to restructure.
“It is worth pointing out that the government is fairly busy at the moment with some very big issues so the fact that they are thinking so actively about business turnaround shows the importance they are attaching to this particular issue.
“The World Bank consistently ranks the UK very highly as a country which it is good to do business with and a good place too to rescue businesses that are struggling.
“These measures can be seen very clearly as the government’s way of making sure that continues.”
For more information on the proposals or for advice on all areas of insolvency and business turnaround visit www.graywoods.co.uk