With more corporate failures likely, the publication of the UK
government's white paper on insolvency seems timely. The government
has listened to the views of those who believe that the present
regime is too pro-creditor and has suggested initiatives designed
to move the UK regime towards a more debtor-friendly slant.
One of the main changes proposed in the policy document is that
administrative receivership be replaced by a revised administration
procedure in which the interests of all creditors (including
unsecured creditors) will be considered. This procedure would be
subject to the overview of the courts in a more public and
transparent process. Neil Cooper, an insolvency and business
recovery specialist with law firm Kroll Buchler Phillips, says:
"The abolition of the right of a debenture holder to appoint an
administrative receiver because occasionally a few banks may have
misused this right is rather like banning cars because some people
may have driven them recklessly. One of the important aspects...
