Ministers have been accused by the shadow business secretary, Chuka Umunna, of “quietly dropping” an extensive review of the insolvency laws covering high-street retailers.
Following the collapse of both Blockbuster and Barratts in November 2013, Mr Umunna demanded an update on progress made, in the light of promises made last December by the Business Secretary Vince Cable to review the way in which insolvencies are handled. Those promises arose out of the failure of electrical retailer Comet in 2012.
Ministers were also asked when a report on the circumstances surrounding the demise of Comet would be completed, since no action has yet been taken over a year later.
Though the company itself is now in liquidation, the Comet brand is still held by administrators. A spokesperson for the Department of Business, Innovation & Skills (BIS) said in response that the Insolvency Service was leading the investigation into Comet and that it was still “proceeding”.
Critics of the insolvency laws have also demanded a review of legislation allowing “pre-packs”, where owners arrange a deal to jettison under-performing stores into administration, and then buy the better ones back, free of debt.
It is always recommended that businesses who may be at risk of insolvency should seek professional advice to help them find a workable solution to the difficulties they may be experiencing. At Palmers we can provide professional guidance on many insolvency matters.