Cooper Williamson Backs New EU Insolvency Legislation

Cooper Williamson Ltd believe the changes will only serve to benefit honest companies who have fallen into financial distress.

"Our current insolvency rules haven’t been updated in almost 13 years and this was long overdue," said Keith Tully, director at Cooper Williamson.

"Our priority as insolvency practitioners is to keep businesses trading and this new legislation will help viable businesses in financial difficulties keep afloat rather than liquidating.

"There are over 1.7 million jobs lost to insolvencies every year – any law changes that will give honest companies and the people they employ a second chance is music to our ears."

The EU commission report emphasises the need for harmonisation of national laws, early intervention, rescue rather than break up, greater visibility for stakeholders and collective involvement in restructuring and insolvency processes.

"This fits comfortably with the approach adopted in the UK over a number of years, so I would expect changes to UK legislation to be minimal," said an Out-Law.com spokesperson.

"However, for many debtors across Europe, this is a step in the right direction; offering a chance of redemption and the opportunity to contribute to the growth needed to kick-start the stalling engine of the European economy."

Under existing EU insolvency laws, the issue over where insolvency proceedings can be initiated has been widely debated and contested in the courts – becoming somewhat of a loophole. The Commission has therefore proposed new definitions and criteria for determining where a debtors' 'centre of main interests' (COMI) can be said to be.

The Commission has also outlined plans to bring pre-insolvency restructuring processes within the scope of the proposed Regulation.

"In the UK that might include Schemes of Arrangement of companies or any of the wide variety of debt relief measures available to individuals – this is an attempt to promote rescue and move closer to the model applied in other non-EU cross-border insolvency laws," an Out-Law.com spokesperson added.

The full report can be seen on the European Commission website at http://ec.europa.eu/justice/civil/files/insolvency-regulation_en.pdf

Or for more information on business insolvency issues please visit www.realbusinessrescue.co.uk for further details.

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ABOUT COOPER WILLIAMSON
Cooper Williamson Ltd offices are based in Wilmslow, they are licensed by the ACCA (Association of Chartered Certified Accountants) and are a member of the R3 Association of Business Recovery Professionals - the UK’s trade association for insolvency, business recovery and turnaround specialists.