BusinessBusiness RecoveryBig banks accused of bullying IPs

Big banks accused of bullying IPs

A row has erupted after the big banks were accused of bullying business recovery professionals into giving them preferential status over other creditors even though they have long since lost that privilege.

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Banks lost first pick at the creditors’ pie after the Brumark case in 2001 ruled that they had to stand in line behind the government and company employees who were owed money.

But R3, the insolvency profession’s trade body, has accused the big banks of attempting to maintain preferential status. John Verrill, R3 vice-president, said: ‘Banks are in denial about preferential creditors’ claims to funds.’

He said banks are applying pressure to be paid first while the Inland Revenue and Customs are saying that if they are not paid first they will hold insolvency practitioners accountable.

He added the banks had ‘made no attempt to resolve the issue, other than delaying payments and bullying insolvency practitioners. There is an atmosphere of menace, a refusal by the banks to confront reality.’

John Thirlwell, director of the British Bankers Association said Verrill?s statements were unfair but added: ‘There is no doubt that different banks are pursuing different policies.’

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