Under the new powers, the courts can disqualify rogue directors straight away if their conduct is deemed unfit, taking them out of the management of insolvent companies.
‘Ensuring the business community and consumers are protected from the activities of rogue directors at the earliest opportunity is vital,’ said consumer affairs minister Kim Howells, ‘the new power to disqualify administratively will save time in the courts.’
Parliament is also bringing into effect other provisions of the Insolvency Act 2000. As of 2 April, interest on bankruptcy estate funds held in the insolvency services will be paid and changes to investment in these funds will come into effect. Changes will also be made to simplify creditors’ reclaiming of interests in deceased persons’ insolvent estates when the in cases of joint onwnership of property.
Additionally, landlords will no longer be allowed to forfeit the lease of a company’s premises by peaceable re-entry during the administration order procedure, unless the court allows it. The prosecution in criminal proceedings will be restricted on the use of evidence obtained under the power of compulsion, that is the existing insolvency law, which makes it a criminal offense not to answer questions in an investigation.
Finally, if voluntary liquidators of companies in England and Wales are suspicious that directors have been involved in criminal activity, they will have to report it to the Secretary of State, according to the DTI.
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
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