Mace & Jones: Conservative insolvency proposals merit serious consideration

Published: 18th July 2008

A leading North West law firm has welcomed David Cameron's announcement that a Conservative Government would re-examine the UK's insolvency regime .

Mr Cameron told business leaders this week that a Conservative Government would import a US-style Chapter 11 court based insolvency regime to help save companies from going bust.

Mace & Jones dispute resolution partner and insolvency specialist Graeme Jump said extra measures to help businesses with credit problems would be a welcome addition to the options available and deserve serious consideration.

"The UK's small business sector is the engine room of the economy and needs maximum protection," he said. "Following the best parts of the US model on insolvency would give companies space and time to restructure and protect themselves from creditors and job losses. Having credit problems is one of the hardest problems any business has to grapple with. The pressure is huge, never more so than now when banks are refusing to lend more. Taking experienced legal advice is vital during any period of cash flow problems and makes a massive difference. But a change in the law, aimed at giving appropriate firms more time to survive, is a sound move. Jobs are such a critical issue in today's climate."

The European High Yield Association, which represents banks, investors, lawyers and insolvency experts, warned last year the UK's insolvency regime needed an overhaul. Increasingly complex restructurings involving hedge funds and private equity firms as well as banks required a "predictable, supervised restructuring process" handled by a court.

Firms wanting insolvency or credit advice can contact graeme.jump@maceandjones.co.uk dominic.vincent@maceandjones.co.uk or call Mace & Jones dispute resolutions teams in Manchester: 0161 214 0500 Liverpool: 0151 236 8989 Knutsford: 01565 634234