R3 rebellion looms.
Small firms threaten breakaway as insolvency body is accused of moving goal posts
R3, the Association of Business Recovery Professionals, faces rebellion from insolvency practitioners at small firms over the set up of a rival association for turnaround professionals that could threaten future business.
Angry small practice insolvency experts believe proposed membership requirements of the soon-to-be established Society of Accreditied Turnaround Professionals will effectively exclude them from turnaround work.
The furore among smaller practitioners – who comprise 65% of the R3 membership – comes as the government pushes forward with a raft of legislation to promote a US-style business recovery culture in the UK, including the delayed DTI/Treasury report due last week on corporate recovery mechanisms.
Threats of a small practice split-off were raised by delegates at a recent R3 conference for smaller practices at Keele University.
The SATP was set up in May to act as a voluntary code regulator for the turnaround profession. But critics say more than 70% of R3 could be precluded from entry to SATP because of its rigorous entry requirements which they claim reflect a big firm bias.
One source said: ‘It is very clear that the large firms of accountants want to get into the large turnaround work that will enable them to deploy their armies of consultants and be free from the regulatory and fee pressures which go with the insolvency practitioner status.’
Delegates in Keele also accused R3 of ‘moving the goal posts’ since its vote in January to admit turnaround professionals without IP licences into the trade association.
Peter Hughes-Holland of Morley & Scott said: ‘Reverting back to SPI or operating a breakaway group is not right despite what our emotions tell us – it would divide or damage the profession.
‘The government is on a mission to change the way we operate, and if we do not respond in the way that embraces change the smaller practioner would suffer more.’