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Insolvency Service launches consultation in response to the OFT’s study on corporate insolvency practitioners

News Release issued by the COI News Distribution Service on 10 February 2011

The Insolvency Service has today launched a twelve week consultation seeking views on proposals put forward by the Office of Fair Trading (OFT) in their report “The Market for Insolvency Practitioners in Corporate Insolvencies”.

Launching the consultation, Edward Davey, BIS Minister with responsibility for the insolvency regime said:

“The helpful report published by the OFT in June last year recommended to Government a number of changes to the corporate insolvency regime to ensure that insolvency practitioners deliver the best possible outcome to all creditors.

“The consultation I am launching today includes proposals for an independent complaints body, and is of great significance to all those who are affected by the insolvency regime. Now is your opportunity to comment on how we can ensure that unsecured creditors get a better deal when companies go under.”

The Government are broadly supportive of the majority of the recommendations made in the OFT report which focussed on the market for corporate insolvency. However, as the regulatory framework applies to all regulated insolvency procedures, the consultation in effect seeks views on both the personal and corporate insolvency market.

The consultation considers three main issues to address the problems associated with the weak position of unsecured creditors:-

· Establishing an Independent Complaints Body, including dealing with fees;

· Reforming the regulatory framework;

· Detailed amendments to legislation relating to administration and liquidation.

The consultation will run from 10 February 2011 to 06 May 2011. All responses will be carefully considered and used to inform what changes, if any, should be made to the regulatory framework for insolvency.

The consultation can be found at http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/con_doc_register/registerindex.htm

Ends

Notes to Editors

Notes to editors 1 The OFT report can be read in full at: http://www.oft.gov.uk/shared_oft/reports/Insolvency/oft1245.

2 The Insolvency Service will invite key stakeholders to a round-table meeting to discuss their response to the consultation proposals in detail.

3 The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk

4 Media enquiries should be directed to:-

Denise Rawls 0207 674 6910

Ade Daramy 0207 569 6187

Contacts:

Ade Daramy
Phone: 020 7596 6187
ade.daramy@insolvency.gsi.gov.uk

Denise Rawls.
Phone: 020 7674 6910
denise.rawls@insolvency.gsi.gov.uk