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.
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