In March 2018, BEIS issued a consultation paper on Insolvency and Corporate Governance. It puts forward a number of measures and also seeks views on other aspects as regards businesses that are in or approaching insolvency.
| Areas |
Proposals |
| Sales of businesses in distress |
Potential changes to ensure that parent company directors responsible for the sale of a group subsidiary take proper account of the interests of the subsidiaries' stakeholders and may be held to account if they fail to in certain circumstances. |
| Value extraction schemes |
Proposals, aimed at treating all creditors fairly, seeking views on new or updated powers to challenge a transaction or series of transactions entered into before insolvency and which unfairly strip value from a company. |
| Dissolved companies |
Proposals to extend the investigative powers of the Insolvency Service into directors of dissolved companies. |
| Corporate governance in pre-insolvency situations |
Questions include:
Are stronger corporate governance and transparency measure required in relation to the oversight and control of complex group structures?
What more can be done to promote engaged stewardship of companies by investors including active monitoring of risk?
Are reforms required to the legal, governance and technical framework within which companies determine dividend payments?
Are directors aware of their duties as regards commissioning and using professional advice?
Are new options needed to protect small and medium sized businesses in a supply chain in the event of the insolvency of a large customer? |
Although not stated, this consultation seems to be a response at least to the collapses of BHS and, more recently, Carillion. The consultation closes at 11.45 on 11 June 2018.
For a full list of our corporate partners and consultants please see page eight of the PDF or contact any of the key contacts listed below.
