Continuity of Supply of Essential Services to Insolvent Businesses
Posted on February 11, 2015 by Patrick Wadsted
Business Minister Jo Swinson (at least it wasn't Vince Cable!) has today (9th February) announced that the Government will be proceeding with plans to secure essential IT and utility supplies to distressed businesses being restructured or rescued out of formal insolvency.
Amendments will be made to the Insolvency Act 1986 to prevent suppliers of IT, water, gas, electricity and communications services cutting off supply or increasing their charges on account of insolvency where insolvency practitioners are working to find a viable solution to rescue the business.
All very laudable. However, there will be some safeguards for the supplier that will enable the supplier to:
- require a personal guarantee from the IP at any time during the insolvency process (like the beginning!)
- terminate the supply if payment isn't made within 28 days
- apply to the Court to terminate the contract (or supply) on grounds of hardship
We have never had a problem with the supply of essential services to any of our cases, yet I now may have to give a personal guarantee to achieve what I had before.
This is meant to be progress!