Business minister Jo Swinson has today announced a review of insolvency practitioner (IP) fee charging and whether it represents value for money and fairness.
The review will be carried out by professor Elaine Kempson of the University of Bristol, who will hear views from members of the insolvency profession as well as debtors and creditors, and a report is expected in summer 2013.
The review will build on an earlier study conducted by the Office of Fair Trading which responded to concerns expressed by creditors that fees charged by IPs do not represent value for money.
There's also going to be a shake-up in the way complaints against IPs are handled by industry regulators.
The Insolvency Service will create a single complaints gateway in the spring next year so complaints against IPs can be made in an easier and more transparent way. There will also be sanctions guidance.
Earlier this week it was announced that the Insolvency Service will investigate the events surrounding the collapse of electrical retailer Comet.
It's "too little, too late" for landlords though, says the British Property Federation.
The property industry has repeatedly made the case for reform of the insolvency system, particularly in relation to pre-pack administrations and payment of rent during insolvency , which it feels is too far tipped towards company rescue, regardless of the consequences for creditors.
Back in April, the BPF launched a campaign, called Taking the Profit, seeking retail insolvency reforms to restore fairness to pensioners, especially with regard to pre-pack administrations.
That came shortly after the High Court had made an important ruling (in Leisure(Norwich) II Limited v Luminar Lava Ignite Limited (in administration)) that potentially lets administrators off the hook for a whole quarter’s rent if they are appointed a day after the quarter day - for more about that see my post at the time Free Quarter for Administrators Strengthens the Case for Monthly Rents.
There's been some encouragement for landlords recently though.
Wragge & Co report on a recent ruling by the court allowing a landlord to forfeit a lease where the tenant's business had been sold by its administrators as part of a "pre-pack" administration on terms that the buyer took on the risk that the landlord's consent to assignment of the lease to the new company would not be obtained.
Photo by LHOON via flickr