< Back to previous page

Govt launches insolvency consultation

Published on 17 Jun 2009 under category: legal

The government has launched a consultation into the insolvency process, it has been revealed.

This could result in the rules regarding this being changed, with one proposal being to give absolute priority to new money lent to firms facing difficult times, insolvency solicitors may be interested to hear.

Another factor is giving businesses time to find company voluntary agreements, rather than putting them into administration.

Pat McFadden, the business minister, said that the government is "focused on helping" firms hit by the economic downturn.

He added: "When a company becomes insolvent, this can hurt employees, directors, creditors and suppliers alike. These proposals will look to reduce those knock-on effects."

Mr McFadden went on to say that the measures outlined aim to keep viable firms going through the credit crunch, insolvency solicitors may be interested to hear.

In other news, General Motors recently revealed that its bankruptcy solicitors were in the process of filing for chapter 11 protection.