Early insolvency advice has the best chance of saving jobs and of successful business recovery, according to a statement from industry association R3.
The trade body for business recovery professionals recently welcomed a new EU insolvency directive that aims to reform corporate insolvency regimes throughout the continent.
The directive specifically targets early corporate restructuring during periods of extreme financial difficulty, so that as many jobs as possible can be saved, and to maximise the potential for successful business recovery.
Frans Timmermans, first vice-president of the European Commission, explained: “We want to help businesses to restructure in time, so that jobs can be saved and value preserved.
“We also want to support entrepreneurs who do fail to get back on their feet quicker, get out there and try again wiser.”
R3 welcomed this pledge, although the organisation also pointed out that many of the measures outlined in the EU directive are already implemented in the UK, while improvements to the UK corporate recovery regime are already the subject of consultation at a domestic level.
Andrew Tate, president of R3, added: “The earlier companies seek advice about their problems, the more likely that businesses and jobs can be saved.
“There is already an increasing focus on restructuring and early intervention as part of the insolvency regime in the UK, and an EU-wide framework for this type of work will make it much easier to handle cross-border cases.”
He also acknowledged the complications that arise from the UK’s upcoming departure from the EU as the Brexit negotiations get underway, currently expected to occur in spring 2017.
As the UK leaves the EU, Mr Tate warned that a deal must be struck to ensure UK insolvency practitioners are still recognised on the continent, to allow cross-border cases to proceed without extra delays or expense.