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Sale of companies before creditor meetings

Comment 13th August 2010

It has become the norm for companies to be sold to existing directors on going into administration. No sale of assets should be allowed before a creditors meeting. This is underhand use of the law to eliminate debt.

If a company is worth saving from bankruptsy the creditors should have the ability to have first call on future ownership.

Why does this matter?

Directors are able to wipe out debt and continue trading at the expense of others.

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