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10 Nov 2009
Parliamentarians have launched an attack on the fees charged by the insolvency profession after 30 MPs signed a cross-party Commons motion urging the government to review legislation so that charges might be reduced and unsecured creditors receive a greater return.
Written by Ochil and South Perthshire Labour MP Gordon Banks, the motion protests that "that current UK insolvency laws and regulations fail to adequately protect unsecured creditors".
Banks complained current law ensures practitioners receive their fees, then secured creditors, who may include banks, leaving unsecured creditors to share out whatever is left.
He said : "Unsecured creditors are in a very difficult position and are often exposed almost to breaking point when one of their customers goes bust.
"To resolve this situation we need to look at reducing the often significant fees charged by receivers, administrators and liquidators to allow for a larger proportion of the estate to be made available for creditors of all nature."
Banks said other means should also be considered to secure "a guaranteed slice of the cake for unsecured creditors".
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Insolvency Gravy Train
And about time too. For far too long Insolvency Practioners and their advisers have milked companies at the expense of unsecured creditors (and shareholders). Unfortunately the revolving door between the regulators and practioners make it unlikely anything will be done!
Posted by: Finian Manson, 10 Nov 2009 | 00:00