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Insolvency Service reveals proposals to potentially save creditors £36m

  • 19 July 2013
  • By Ashleigh Wight

The Insolvency Service has unveiled proposals that could collectively save creditors of insolvent companies £36m a year by cutting out unnecessary red tape.

The news comes as the government launches an independent review of pre-pack administrations, hoping to address the long-term impact the deals have on creditors.

The Insolvency Service has launched a consultation, Red Tape Challenge – changes to insolvency law to reduce unnecessary regulation and simplify procedures, which outlines proposals to cut out needless processes and modernise the way that insolvency practitioners deal with creditors.

Proposals include reducing the number of meetings that creditors need to attend reducing the need to receive approval from creditors for actions clearly in their interest and reducing costs where by instead of paying small dividend payments to an individual creditor, the money is used for a wider benefit of creditors.

Business and enterprise minister Michael Fallon said: “Many of the proposals being consulted on were put forward by creditors and others affected by the law. This is an excellent example of stakeholders working together through the Red Tape Challenge to improve efficiency and benefit business.”

The consultation opens today (18 July) and will run for 12 weeks until 10 October. A full list of the proposals can be viewed on the Insolvency Service website.


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