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Companies: Insolvency

Volume 461: debated on Wednesday 6 June 2007

To ask the Secretary of State for Trade and Industry what plans he has to limit the amount administrators can charge in the event of a company going into administration. (140822)

The insolvency rules already give creditors the right to apply to court for an order that the administrator's remuneration be reduced in circumstances where they consider it to be excessive. The insolvency profession is also a regulated profession and as such all insolvency office-holders are authorised and are required to follow industry standards, published in the form of statements of insolvency practice.

Although the Government have no plans to limit the amount of remuneration that administrators may draw, The Insolvency Service is undertaking a project to modernise the insolvency rules. One of the changes being considered is a requirement for all insolvency office-holders to provide details of remuneration charged on a regular basis and to provide creditors with clear rights to seek better particulars and to enable them to challenge those amounts where they consider them to be excessive. This should ensure greater transparency and accountability for creditors of amounts of remuneration drawn by administrators and other office-holders.