29 July 2009

Insolvency Act 2009: Shoring up Corporate Goodwill and Protecting Stakeholders


A one-day workshop on the Insolvency Act 2009, with the participation of regulators, bankers, accountancy professionals and law practitioners, is being held today at Le Sirius Labourdonnais Hotel in Port Louis.

An initiative of the Insolvency Service in collaboration with the Ministry of Finance and Economic Empowerment, the workshop will serve as a platform where the participants will exchange views on the new legislation. The Insolvency Act 2009 which came into effect on 1st June this year is a fundamental component to improve the ease of doing business in all sectors of the economy and at all stages of an enterprise's development that is from start-up to closing down.

Launching the workshop, this morning, the Vice-Prime Minister, Minister of Finance and Economic Empowerment, Dr. Rama Sithanen, stressed that the Insolvency Act will secure the reputation of Mauritius as a well governed business and financial services centre and a trustworthy investment destination. It is also expected to shore up corporate goodwill and protect all stakeholders, he added.

The main thrusts of the Act are to consolidate and modernise the legal framework for insolvency by updating and integrating it in into a modern, omnibus legislation. In addition, the law redefines the priority of claims in the distribution of assets in liquidation and gives workers' unpaid salary higher priority than the secured creditors. It also sets alternative measures to bankruptcy.

Besides, the Insolvency Act 2009 reflects the objectives of the Government in implementing an insolvency regime that effectively balances the interests of debtors, creditors and other stakeholders while making the insolvency proceedings more transparent.

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