Insolvency changes sidelined
Reforms to the international insolvency regime are 'stuck in the mud' more than two years after the finalisation of the UNCITRAL model law.
Link: Budget follow-up: Insolvency rules to change
Vital in making international insolvencies easier to carry out, the reforms were not included in last week’s Finance Bill, and remain in the ‘to-do list’ of the US and UK government.
The reforms include provisions for the recognition of court decisions in other countries.
This stagnation is despite the fact that both countries have passed necessary reforms to introduce the legislation. In the UK, the reforms were included in the Insolvency Act 2000, but the starting date of their implementation has not yet been decided.
In the US, it was passed by both houses of parliament as Chapter 15, but has been held up because the Democrats believe the new bankruptcy regime is too draconian. It has also caused some controversy because some clauses that are not central to the law have caused protests.
The stagnation of the law is causing concern. Neil Cooper, technical director and former president of INSOL international, said: ‘This is failing to set an example to other countries that do not have insolvency laws as good as the US and the UK. We want both the US and the UK to enact the reforms. We need some of the major trading nations to adopt it as an example, and others will follow.’
