PracticeConsultingInsolvency ‘shock’.

Insolvency 'shock'.

Gordon Brown shocked the insolvency world this week by announcing proposals to abolish both crown preferential treatment and administrative receivership.

The radical shake-up of insolvency law was announced on Monday as part of a wider of package reforms outlined in the chancellor’s ‘Enterprise for All’ document. ‘It’s quite a shock,’ said Simon Freakley, head of Kroll Buchler Philips. ‘We all knew the government was thinking about these issues but there was no indication Brown was going say this.’

In a move welcomed by insolvency practitioners, Brown said the government would remove crown preferential treatment, a procedure that puts the Inland Revenue and Customs & Excise at the top of the list of creditors when companies crash.

But experts were more cautious about proposals to ensure collective procedures are used instead of administrative receivership.

More on this can be found on page 3.

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