Friday, 27 January 2012

Pre Pack Administrations

Once more we are confronted with the British Government looking after their own. Pre Pack Administrations allow directors of struggling companies to ditch their liabilities and rise pheonix like from the wreckage. A buyer can be found secretly for the company and the creditors are then left high and dry with no redress. Often the original owners then resume their control of the now debt free company. 
It is the small creditor who loses out. To the insolvency practitioner these debs are individually small. To the plumber, electrician and cleaning company they can be huge. In fact in many cases the non payment can be the difference between staying in business or crumbling.
These agreements must be regulated and creditors given adequate notice of their likely difficulties. The people who have run the company into insolvency must be barred from having any more part to play in the ownership or running of the company. They do not lose out but gain by having their incompetence covered up by the insolvency practitioners.
In the old saying of the public: