Tuesday July 15, 02:43 PM
Cameron's Plan To Save Businesses
By Sky News
David Cameron is proposing a shake-up of Britain's bankruptcy laws to allow ailing companies to stay in business. In a speech to the Confederation of British Industry, the opposition leader said a Tory government would consider creating
a 'Chapter 11' scheme - similar to the one operating in the US - to help people hold onto their jobs.
"The credit crunch has meant more companies are finding it hard to get the money they need to keep their business alive," he said.
"That means one thing: more companies going into liquidation. And we all know what liquidation means: job losses.
"This isn't right. Not for the companies, many of which are actually fundamentally sound."
The Conservative Party will look at the American system which permits businesses which can't repay their debts to apply to a bankruptcy court for protection.
While the court supervises the reorganisation of the company's debts, the business can continue.
The court is able to suspend the company's debts so it can make a fresh start.
If debts exceed assets the company's creditors get ownership of the newly reorganised firm.
"This change will ensure that fewer good companies end up in liquidation and less people lose their jobs through no fault of their own," he said.
"But of course, we cannot - and should not - save all companies that fail."
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