‘Bankruptcy Tourism’ Crackdown Shuts 61 Companies in Britain

Insolvency authorities have closed 61 companies set up in Britain to take advantage of the easy-going bankruptcy rules.

The firms were linked to Rainer Von Holst and Ann Von Holst, both German citizens and business advisers in that country. They recommend that companies adopt British status. The Insolvency Service said the pair were offering British companies to German clients ‘when bankruptcy or commercial difficulties threaten’. It is thought that this was a way of transferring the domicile of a troubled German company to Britain and then using British bankruptcy law to go bust.

The technique is known as ‘bankruptcy tourism’. Companies employ this technique to use British law to go bust in a pre-pack insolvency, which means they can shuffle off creditors and then be relaunched free of debt.

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