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Company debt advice 'could be affected by pensions ruling'

Date Added: 14/12/2010  

A new pensions ruling could have consequences for firms in the business recovery sector such as those which offer company debt advice to organisations that are struggling financially.

This is according to insolvency trade body R3, which was commenting on an announcement made by Judge Michael Briggs.

John Frances, technical director of R3, stated that creditors could be set to suffer as a result of the decision.

"Promoting outstanding pension debts to super-priority status after the insolvency means that returns to unsecured and preferential creditors could be wiped out," he said.

Mr Frances added that creditors already have little certainty when they come to lend to firms including those which are taking company debt advice.

Richard Allen, a former member of the Forum of Private Business, recently stated that the government's continued relaxed attitude to firms avoiding paying tax by basing themselves on the Channel Islands is going to have a negative effect on organisations based on the mainland.

Posted by Julie Cutts 

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