Written question asked by Barry Sheerman (Labour) on Wednesday, 12 May 2004, in the House of Commons. It was due for an answer on Monday, 24 May 2004. It was answered by Gerry Sutcliffe (Labour) on Monday, 24 May 2004 on behalf of the Department of Trade and Industry.

Dept of Trade and Industry

Question: To ask the Secretary of State for Trade and Industry, if she will take steps to ensure that the administration of a company following its liquidation is used as an effective tool to safeguard the interests of shareholders and stakeholders, including employees.

Answer: Mr. Sheerman: To ask the Secretary of State for Trade and Industry if she will take steps to ensure that the administration of a company following its liquidation is used as an effective tool to safeguard the interests of shareholders and stakeholders, including employees. [173853] Mr. Sutcliffe: The Enterprise Act 2002 introduced changes that allow a liquidator to apply to court for an administration order. The court would have to be satisfied that the company would achieve the purpose of administration, the primary objective of which is to rescue the company as a going concern and failing that to achieve a better result for the creditors than on a winding up. If companies and their businesses can be rescued rather than wound up, then the outcome will be better for the company itself, its employees, its creditors, its shareholders and the economy as a whole.

Secondary information