Britain is at risk of becoming the “insolvency brothel of Europe” as foreign companies are moving to the UK to go bust in order to take advantage of our insolvency system.
Richard Nevins, a restructuring partner at the law firm Cadwalader in London, said the main benefit for bankruptcy tourists is that it allows firms to get rid of certain types of troublesome creditors.
Companies such as Greece’s Wind Hellas, a telecoms operator, and Germany’s car parts maker Schefenacker briefly moved their headquarters to the UK to undergo a British administration procedure. Businesses need only be resident here for a few weeks, have a UK address and pay the lawyers’ fees.

Some are less keen to see deals moving to London after several restructurings and court decisions punished junior lenders, who receive higher interest for lending money to a company but are last in the line for repayment if it goes bust.

See the full article from “The Guardian”



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