Insolvency rules altered to protect retailers
Government reverses controversial Trident ruling
The government has taken the long-awaited move to protect companies in
administration from paying business rates on unoccupied properties.
The decision reverses the effect of the
Trident ruling, where
the courts found that council business rates should be treated as a preferential
creditors in an administration.
Insolvency experts had warned that Trident had put back insolvency rules by
20 years and would cause many retailers to collapse.
‘We are committed to the promotion of a rescue culture which provides
opportunities for insolvent companies that have viable underlying businesses to
be rescued wherever possible,’ said local government minister
John
Healey.
‘A permanent exemption will remove any potential for decisions about whether
to enter administration to be distorted by differences in rates liability.’
President of R3 Patricia Godfrey said the decision could not have come at a
better time for retailers: ‘With the effects of the credit crunch increasingly
likely to be felt in the new year, this move will help administrators save
business and jobs.’
Further reading:
Government to step in to save
retailers
Insolvency rules lead to retail collapse
fears