§ 34. Mr. FabricantTo ask the President of the Board of Trade what discussions he has had regarding the creation of a legal framework whereby companies experiencing cash flow and insolvency problems are allowed time to trade out of their difficulties before being put into the hands of receivers; and if he will make a statement. [21976]
§ Mr. Jonathan EvansThere are already procedures in the insolvency legislation which can assist companies with such problems and there has been extensive discussion since my Department commenced a review of these in 1993. In April 1995 the Insolvency Service issued a further consultative document on proposals for a new company voluntary arrangement procedure. These proposals include a 28-day moratorium, binding on all creditors, which gives companies a breathing space during which to put together a rescue plan. It is also proposed that floating chargeholders give five working days notice before they can appoint an administrative receiver, to allow companies an opportunity to seek advice.