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Insolvency (Protection of Essential Suppliers) Order 2015

Author: Nigel Cook

This Order which will come into effect on 1st October 2015 is derived from the Insolvency Service Consultation and draft Order issued in July 2014 which we reported previously. The Order seeks to assist the appointed office holder by giving protection from predatory action or negotiation of an unfair advantage by suppliers when the business is in administration or CVA. For example it provides that any contract terms allowing suppliers to withdraw supply or demand additional payments upon business insolvency will be void.

Essential supplies now extend beyond the usual utilities to include data storage, website hosting, and server providers, but card payment services (although included in the draft) are not included. Suppliers can require the office holder to guarantee payments after the appointment as a condition of supply and can terminate supply if payment is not made within 28 days of the due date.