Government proposes to legislate on Value Extraction Schemes
In October 2013 Griffins wrote a paper called “Balancing the Books” that proposed replacing the existing Extortionate Credit Transaction law with a “Fair Dealing” section that would enable an IP to reverse a transaction that;
a) required the company to make unfair payments or
b) created a disproportionate benefit to a third party at a cost to creditors or
c) otherwise contravened ordinary principles of fair dealing.
The document was written in support of a campaign to challenge the practice of some lenders and other parties who were preying on the assets of companies weakened by insolvency and against whom there was no remedy.
The document was examined by the Treasury Select Committee and the main political parties. We are therefore delighted that the very same principles have now appeared in the government’s proposals to reform the law in this area under the title “Value Extraction Schemes”.
Click HERE to read the original proposal document.