November 08, 2011
UK insolvency authorities have closed 61 companies which attempted to thrive on Britain’s “easygoing” bankruptcy rules.
The widespread scam relied on a concept known as “bankruptcy tourism”, whereby foreign companies transfer their domicile to Britain in order to take advantage of the country’s lenient bankruptcy laws.
All 61 firms were linked to Rainer Von Holst and Ann Von Holst, both German citizens and business advisers in that country. According to the Insolvency Service, the duo were offering British companies to German clients “when bankruptcy or commercial difficulties threatened”.
Companies would then employ this technique to use British law to go bust in a pre-pack insolvency, which means they can shuffle off creditors and then be re-launched free of debt, the Insolvency Service said.
However, the companies have all since been closed after the Insolvency Service sought a court order to wind them up for a series of offences, including filing false information at Companies House and failure to co-operate with its investigators.
Geoff Hanna, Investigations Manager at the Insolvency Service, told thisismoney.co.uk there had been a “serious disregard for the laws that govern all limited liability companies”.
“We will not allow the reputation of the British corporate regime to be tarnished by allowing such abuses to continue with impunity,” she added.
