UK in need of Chapter 11
Published Date:
18 July 2008
The recent call by entrepreneur and Dragons' Den star, Doug Richard, for the introduction of US-style "Chapter 11" proceedings in order to reduce the stigma of bankruptcy is to be applauded. It is also to be noted that the Diablo Grande scheme in the US, in which HBOS has loaned over £10 million, has also sought protection under "Chapter 11" (your report, 16 July).
In the UK this concept does not exist, with companies going into administration usually broken up to salvage whatever assets are left and to pay off creditors. "Chapter 11" amounts to a state of temporary bankruptcy, with firms unable to service debts or pay creditors given court protection from creditors when they file for bankruptcy. In this situation the firm is given time to restructure, under court supervision, in order to meet debt obligations and with the potential to make a fresh start, saving jobs and the business.
ALEX ORR
Bryson Road
Edinburgh
The full article contains 164 words and appears in The Scotsman newspaper.
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Last Updated:
17 July 2008 8:57 PM
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Source:
The Scotsman
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Location:
Edinburgh
