''Report of the Review Committee on Insolvency Law and Practice'' (1982) Cmnd 8558, also known as the "Cork Report" was an investigation and set of recommendations on modernisation and reform of

UK insolvency law United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While UK bankruptcy law concerns the rules for natural persons, the term insolvency is generally used for companies formed under the ...

. It was chaired by Kenneth Cork and was commissioned by the Labour government in 1977. The Cork Report was followed by a White Paper in 1984, ''A Revised Framework for Insolvency Law'' (1984) Cmnd 9175, and these led to the

Insolvency Act 1986 The Insolvency Act 1986c 45 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK. History The Insolvency Act 1986 followed the publication and ...

Principles

The two key principles suggested by Cork were:

Recommendations

Rescue culture

The central argument of the report was that too many companies were simply left to die, when they could be revived, saved or brought to a close in a more orderly way. Cork advocated that the law should encourage a "rescue culture", to restore companies back to profitability, which would be in the longer term interests of creditors.

Floating charges

It also said there was no place for automatic crystallisation of

floating charge A floating charge is a security interest over a fund of changing assets of a company or other legal person. Unlike a fixed charge, which is created over ascertained and definite property, a floating charge is created over property of an ambulator ...

s ‘in modern insolvency law’, on the basis that it would adversely affect other creditors and that the charge did not need to be registered.

Professional regulation

Cork recommended that private insolvency practitioners should be professionally regulated to ensure adequate standards of competence and integrity. Creditors be given a greater voice in the choice of the liquidator and new penalties and constraints be placed on errant directors. Cork also proposed reforms designed to increase the survival chances of firms in difficulties. He had informed the press, on the establishment of his committee, that many more companies could be saved if outside administrators could be brought into the process.

Notes