|
The corporate (company) provisions of
the Enterprise Act 2002 were brought into force on the 15th
September 2003.
From that date the order of priority
as to "who gets what" changed.
The "crown" gave up their right
to be preferential creditors, such that VAT and PAYE liabilities
are unsecured claims in any insolvency commencing after the
15th September 2003.
The governments idea behind giving up
their right of priority was to make it a more even playing
field between the different categories of creditors.
If the government had done nothing further
than abolishing "crown preference" however it would
be likely, in many instances, that the company bankers would
have scooped the entire pool of cash under the banks debenture.
The legislature therefore had to "prescribe a part"
of the money that would have ended up in the hands of the
banks as not being available to them.
Instead that "prescribed part"
is to be distributed to unsecured creditors.
If you wish to read further:
- Click
here for the definition of the "prescribed part"
and an illustrative calculation of the prescribed part and
a commentary.
- Click
here to identify the circumstances in which the prescribed
part comes into operation.
|
