Bankruptcy Brothel

Britain is fast finding out that watering down bankruptcy legislation can have unexpected consequences.  Lenient insolvency laws (bankruptcy generally 12 months or less in Britain) are being exploited by both British and Foreign companies to off load debt.

The Third largest Telecom in Greece moved its assets from Luxembourg to its British 1 man 1 desk office.  Two weeks later it started used bankruptcy law to wipe out more than 9 Million Pounds owing to Royal Bank of Scotland.  They formed a new company which had been freed of 1.3 Billion Pounds of debt.

With the Greek economy on the rocks experts say the Bankruptcy Laws could lead to Britain could become a “bankruptcy brothel”

If Australia is not to follow a similar path Bankruptcy legislation should be tightened.