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BUSINESSES IN ADMINISTRATION, ROLE OF SUPPLIERS AND INSOLVENCY ACT

EDM (Early Day Motion) 2621: tabled on 19 January 2012

Tabled in the 2010-12 session.

This motion has been signed by 6 Members. It has not yet had any amendments submitted.

As this motion is using historical data, we may not have the record of the original ordering, in which case signatories are listed alphabetically.

Motion text

That this House notes that the Association of Business Recovery Professionals-R3 (Rescue, Recovery, Renewal) has declared that present uncertainty surrounding `administration expenses' is forcing more businesses into closure instead of rescue; is concerned that trading a business in administration is being made far more expensive by suppliers, including `on suppliers' who take advantage of insolvency situations by demanding ransom payments, increasing tariffs on withdrawing supply altogether; supports R3's `Holding Rescue to Ransom' campaign which seeks amendment of section 233 of the Insolvency Act 1986, which fails to protect businesses in administration against such unreasonable actions; further notes R3's estimate that such a change could result in over 2,000 additional business rescues a year, a 14 per cent. reduction in liquidations, a 22 per cent. fall in the number of pre-packaged administrations, increased returns to creditors and more jobs being saved; andcalls on the Government to bring forward legislative proposals to ensure that suppliers continue to supply at a reasonable cost on insolvency, as is the case in the US under the `Chapter 11' procedure, and in doing so still have the security of priority payment as an `administration expense'.