Insolvency reforms ‘make already-good corporate recovery better’

Published on February 20, 2015 by Crawfords Accounting

Following the news that key suppliers will be unable to cut off customers during business insolvency, industry trade body R3 have said that the reforms should improve the already-good UK corporate recovery system.

Last week we reported on the plans, due to come into effect from October 2015, to ensure utility and IT suppliers cannot cut off troubled customers, or charge a punitive tariff for continued supply.

The intention is to ensure there are no unnecessary obstacles to corporate recovery, and R3 told us the changes should help to make sure this is the case, but could still go further.

A spokesperson explained that the UK already has a good business rescue culture, and the upcoming changes are simply an attempt to improve that further.

He added that the reforms remove some of the remaining obstacles, which should help more companies and jobs to be saved, but they do not go as far as R3 had hoped.

As we reported last week, the trade body believes the scope of these changes should be expanded, so that a wider variety of suppliers are subject to the same limitations, further protecting troubled companies during the sensitive business rescue process.

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