Insolvency practitioners could be banned from getting appointed as administrators of companies where they have served as restructuring advisers.

An Office of Fair Trading inquiry is thought to be taking a look at a revolutionary new rule that could mean any insolvency specialist who advised a seriously indebted firm or even its lenders could not go on to deal with a subsequent insolvency.

This may be made to stop supposed conflicts of interests under which insolvency practitioners, asked to review a troubled business, recommend administration and then later get the often lucrative work involved.

R3, the insolvency practitioners’ trade body, is thought to oppose this kind of ban, believing that the practitioner which reviewed the company may be best placed to deal with virtually any subsequent administration.

The OFT may possibly also demand an independent regulator for insolvency professionals, just like the new Solicitors Regulation Authority. 

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