The Governments “Red Tape Challenge” has started to produce some sensible results in dealing with an excess of unnecessary bureaucracy. There are going to be a whole raft of changes but some of the most relevant ones which seem to indicate a more “grown-up” attitude are that:
- a liquidator or trustee in bankruptcy will no longer need to get a third party to sanction the exercise any of their powers contained in Schedules 4 and 5 of the Insolvency Act;
- similarly, a liquidator in a solvent liquidation will no longer need a resolution from the shareholder to pay the company’s creditors in full;
- in an Administration, creditors will have the power to extend the Administration period by up to a year; rather than 6 months; where it is appropriate;
- an Administrator will now have the power to make a distribution of the Prescribed Part to unsecured creditors without needing to obtain Court sanction.
We are hopeful that these changes illustrate that the Governments is prepared to trust Insolvency Practitioners and creditors to deal with matters on a commercial basis between themselves.