New Bankruptcy Bill provides cushion for businesses

Bankruptcy is no longer a death sentence to investors, and they have been sent a clear message that they don’t need to be afraid to take risks.{{more}}

The Bankruptcy and Insolvency Bill was passed in Parliament last Tuesday, October 30th.

Making his contribution to the debate, Prime Minister Dr Ralph Gonsalves said that protection is needed because while it is desirable for people to run solvent businesses, “It is in the nature of enterprise that risks will be taken.”

He said that the current legislation on the law books that originated in the early 20th century was steeped in a particular class perspective, which has made many business persons, especially the young, feel like failures as soon as they stumbled.

He said that the laws formed back then were set up with a social system in which it was felt that only if you are of a particular class, and even colour, that you can run a business.

He said that the new law would provide a safety net, which could help to put a businessman who has failed back on his feet again.

Opposition Leader Arnhim Eustace hailed the bill as a key tool in encouraging local and foreign investment in the country.

Terming the bill a very worthy addition to the financial infrastructure of the country, Eustace said that it will add to investor confidence.

Among other things, the bill makes provision for the rehabilitation of insolvent debtors, and the creation of the office of a Supervisor of Insolvency.

The bill also addresses the procedures as to how a bankrupt person’s assets should be liquidated and distributed in a fair manner among creditors.

Senator Richard Williams and Opposition Senator St Clair Leacock also debated the bill.

For his part, Senator Williams recalled an incident in which an acquaintance of his went bankrupt, and was left basically helpless.

The individual, Senator Williams said, was later held with drugs.

While he did not condone the person’s action, he suggested that the frustration of bankruptcy, along with the remaining debts that he was unable to service, could have contributed to the decision to turn to drug dealing.

The Cadet Force Bill was also passed at that sitting of Parliament.