The introduction of the Enterprise Act heralds a major shift in the relationship between debtors, creditors and the other stakeholders affected by an insolvency situation. It is reasonable to say that trade creditors have usually fared badly when compared with secured creditors in terms of making a recovery in an insolvency. It may be that the Enterprise Act will improve their lot and certainly that is the intention.
How that may be achieved is outside the scope of this article, although it is clear that the emphasis on business rescue and turnaround will become even greater. But notwithstanding this significant change in approach, there remain certain fundamental rules for seeking to minimise your exposure to a trade debtor:
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