July & August 2016 Credit Management magazine

More documents

Recommendations

Info

DON’TGET CAUGHT OUTIN THEWEB OF AMLREGULATION AMLAUDIT -PASSORFAIL? Would your AML checks stand up to scrutiny? SmartSearch hosts all your AML search and outcome data including Sanction &PEP screening. All this data can be retrieved 24x7 for any investigation or audit purpose. This includes all enhanced due diligence information. Call us now to book afree demonstration on: 0113 333 9835 THE ONLY AML RESOURCE YOUNEED Or vist us online: SMARTSEARCHUK.COM SmartSearch delivers UK and International Business checks, plus Individual checks along with Worldwide Sanction &PEP screening, daily monitoring, email alerts and full enhanced due diligence intelligence. 12 July / August 2016 www.cicm.com The recognised standard in credit management
INSOLVENCY NEWS CORPORATE INSOLVENCY: RESCUE PLAN…BUT WHAT ABOUT CREDITORS’ RIGHTS? THE Government’s consultation on its review of the existing corporate insolvency framework and options for reform is in part about rescuing insolvent companies, but just as much about rescuing the reputation and ranking of the UK insolvency regime in the eyes of the World Bank (WB). The Government’s stated aim is to reclaim the UK’s top five placing in the WB’s rankings, and to achieve that it is focussing on measures to enhance rescue mechanisms. ITS PROPOSALS COVER: • A new moratorium – a freezing of creditors’ enforcement rights for three months • Special provisions for ‘essential’ suppliers – in effect, forced continuation of supply • Voting changes to avoid ‘out of the money’ creditors from blocking rescue plans; and • Priority for post-insolvency lenders to facilitate trading on in insolvencies. A recurring theme is the importation of US New voting proposals would see certain creditors’ votes overruled where those with a financial stake in the process seek to avoid being frustrated by minorities whose interests would be unaffected. The government’s plan is to create a restructuring opportunity that binds creditors (including secured creditors). and European-style ‘debtor in possession’ processes – leaving the directors in control whilst rescue plans are drawn up. This would be subject to oversight by a ‘supervisor’ – but note plans to extend this role to professionals other than licensed and regulated Insolvency Practitioners. MORATORIUM This is intended to be a gateway into rescue or company insolvency, or at least provide a breathing space for companies in difficulty. The maximum period of the ‘freezing’ is to be three months; this could only be extended by a vote of creditors. Creditors would be prevented from commencing or continuing with any legal actions, presenting a winding-up petition, or repossessing assets during the three months, but the company must be able to meet ongoing commitments and have a reasonable prospect of recovery through a rescue plan. The company’s stay would become effective when its application is filed in court, and creditors (who must be sent a copy) would have an opportunity to challenge within 28 days. The aim is to ensure that creditors are not worse off at the end of the moratorium period, and creditors would have a right to request information (a provision that might be extended to other insolvency procedures). The supervisor during the moratorium might be an IP (who could not then act in any subsequent insolvency process) but under current proposals could also be a non-IP accountant or solicitor – an interesting proposal given the capacity and expertise in the insolvency profession and the need to perform functions akin to those in a Company Voluntary Arrangement, where an IP must supervise. IPs’ fees are subject to new requirements (as reported in this column recently), but there are no details in the consultation document about how non-IP supervisors might be remunerated or their costs controlled by creditors. ‘ESSENTIAL’ SUPPLIES Key trade suppliers would be included in a wider definition of supplies deemed to be essential to keep a business trading. The company could designate those it considers essential. Creditors can appeal to the court but would otherwise be compelled to supply. VOTING ON A PLAN New voting proposals would see certain creditors’ votes overruled where those with a financial stake in the process seek to avoid being frustrated by minorities whose interests would be unaffected. The government’s plan is to create a restructuring opportunity that binds creditors (including secured creditors). It also proposes to reintroduce a voting process using a combination of number and value – a system last seen in UK insolvency legislation thirty years ago, but used in the Companies Act scheme of arrangement. Voting will be by electronic means. The court will have a role to play in safeguarding creditors’ rights. LENDERS’ RESCUE FINANCE Companies will be able to grant new security to those who provide finance to enable the company to continue in business and trade during the moratorium period. This will have priority in the proceedings, ranking above ordinary creditors – a ‘super priority’. The Government’s central aim here is to facilitate more company rescues, which it hopes will produce better returns for creditors. Protection from creditor action is seen as a necessary adjustment in the balancing of rights, but short-term frustration may be appeased by longer-term gains through the survival of viable businesses and a greater prospect of ‘returning money to creditors quickly and at a lower cost’ – an area in which improvement is necessary if the Government is to achieve its aim of a higher WB ranking. Read 90-day moratorium article on page 8. David Kerr MCICM is the Chief Executive of the Insolvency Practitioners Association (IPA). The recognised standard in credit management www.cicm.com July / August 2016 13
Page 1 and 2: CREDIT MANAGEMENT CM JULY / AUGUST
Page 3 and 4: CONTENTS JULY/ AUGUST 2016 www.cicm
Page 5 and 6: The recognised standard in credit m
Page 7 and 8: CICM NEWS COMPLAINTS AGAINST PAY DA
Page 9 and 10: NEWS IN BRIEF SOLAR CLOTH COMPANY I
Page 11: FCA APPOINTS NEW DIRECTOR OF SUPERV
Page 15 and 16: LEGAL MATTERS INTRODUCING... DAVID
Page 17 and 18: OPINION WHAT’S APP WITH DIGITAL D
Page 19 and 20: FEATURE SPECIAL the other end of a
Page 21 and 22: indeed misled investors regarding t
Page 23 and 24: further application, creating a les
Page 25 and 26: INVESTIGATION DIRECT ACTION Sean Fe
Page 27 and 28: FEATURE SPECIAL continued from page
Page 29 and 30: TRADE TALK According to FSB, more t
Page 31 and 32: JUST TOO MUCH DEBT I recently spott
Page 33 and 34: CICM Chartered Institute of Credit
Page 35 and 36: PROGRESS WITH CONTINUING PROFESSION
Page 37 and 38: EDUCATION OPENING more DOORS With C
Page 39 and 40: WALLETS, or purses, have been aroun
Page 41 and 42: WHAT RISKS ARE YOU TAKING? WHY TAKE
Page 43 and 44: Sector Getting Better Mining & Quar
Page 45 and 46: “The programme has enabled us to
Page 47 and 48: assignments and conduct your profes
Page 49 and 50: FORTHCOMING EVENTS FULL LIST OF EVE
Page 51 and 52: The recognised standard in Credit M
Page 53 and 54: CICM BRANCH NEWS KENT BRANCH CROSS
Page 55 and 56: THAMES VALLEY BRANCH PRIESTS, NUNS
Page 57 and 58: BI-LINGUAL CREDIT CONTROLLER SUCCES
Page 59 and 60: Cr£ditWho? CICM Directory of Servi
Page 61 and 62: Cr£ditWho? CICM Directory of Servi
Page 63 and 64:
CREDIT MANAGEMENT CM MONTHLY PRIZE
show all

July & August 2016 Credit Management magazine

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?