Distributing an Insolvent's Assets - Is Parri Passu Dead Language?
The government has produced its White Paper based on Sir Kenneth Cork's recommendations on insolvency reform. A bankrupt is required to surrender his personal and financial assets which are to be distributed among his creditors in proportion to the amounts that they are owed. The principle of 'parri passu' has been eroded to such an extent that an insolvency assignment which provides any return to the ordinary unsecured creditor is the exception rather than the rule. Generally, the assets are burdened with fixed charges in favor of creditors. A trade creditor, who gives credit without any security, is expected to get a share of the book debts should his customer fail. The claim of preferential creditors is increasing monstrously. The Cork Report included some proposals for severe curtailment of preferential claims. The government will have to pursue the recommendations of the Cork Report more vigorously if parri passu is to live again.
Publication Name: The Accountant
The Government on Cork
The government has produced its White Paper based on Sir Kenneth Cork's recommendations on insolvency reform. After an initial favorable response, the government's proposals have come under attack. According to some commentators, the new Insolvency Bill will owe more to the government's short term policy of administrative cutbacks than to improve the lot of the unsecured creditors. The Cork report is concerned with the protection of unsecured creditors. But the government has opted for voluntary regulation that liability to creditors will lie with the managers of the companies. The Report strongly recommended the reduction of preferential creditors. But the review committee recognized that loss of preference for taxes could effectively mean that the collection of taxes would, in insolvencies, insure to the benefit of the private creditor. One point welcomed by consumers and businessman is the introduction of the administrator.
Publication Name: The Accountant
Is fundamental tax reform dead? An economic assessment of key proposals
The US system of taxation can be improved with reform according to surveyed tax professors. Reform should address distortion, cost-effectiveness, equity, and stimulation of savings issues. The Taxpayer Relief Act of 1997 only momentarily silenced debate on more radical reforms advocated particularly by conservative-minded congressional Republicans. Flat tax, national sales tax, and value-added tax proposals were also considered by the surveyed professors.
Publication Name: Taxes: The Tax Magazine
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