Thursday, August 14, 2008

12,571 companies where the administration or liquidation process began more than 15 years ago are not finalised.

Insolvency: a licence to print money

David Cameron wants to reform insolvency procedures. Insolvency is a licence to print money. Practitioners are paid before any creditor and can charge more than £600 for an hour's work. They do not owe a "duty of care" to all stakeholders affected by their practices, and that provides plenty of incentives to prolong insolvencies. Both Maxwell Communication Corporation plc (looted by Robert Maxwell) and the Bank of Credit and Commerce International (BCCI) began liquidation proceedings in 1991. Neither has been finalised, but MCC plc has generated £88m in fees for the insolvency practitioners and BCCI's liquidators have collected over £400m. Nor are these cases unusual. Is the Tory leader willing to take on big accounting firms and open a new chapter in saving jobs?

Posted by malct @ 09:23 PM (833 views)
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6 thoughts on “12,571 companies where the administration or liquidation process began more than 15 years ago are not finalised.

  • Yerhavingalaugh says:

    Is it any wonder that the Unions are taking action to protect their members’ living standards when they see corporate greed being exercised by bankers, accountants, lawyers and others without impunity or conscience?

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  • Eternal Sceptic says:

    So long as people who manipulate money are regarded as heroes and those that make it treated as vermin, I’m not about to hold my breath.

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  • Sorry yerhavingalaugh, but so far the unions have agreed below inflation wage increases for all public sector staff and those in the private sector. It would appear that GB has had the unions teeth filed down to stumps and muzzled them for good measure, just so he can continue this charade of economic bliss and low interest rates. It would be nice to see one or two develop a backbone and begin to demand real wage increases to match the new, and permanent, high outgoings we all face.

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  • Yerhavingalaugh says:

    [email protected]

    Let’s see what happens if London grinds to a halt next week and the first week in September. May be others will develop a backbone and GB will be history by October.

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  • mark wadsworth says:

    Malct, good find (off topic, I know, but it’s good to be reminded of the skullduggery that goes on)

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  • The problem is that when companies tend to go bankrupt this is predicated by the use of very complex accounting techniques to try and hide losses from shareholders and middle management might hide losses from bosses. Unfortunately it often takes lots of untangling which costs money.

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