Question to the Department for Business, Energy and Industrial Strategy:

To ask Her Majesty's Government what are their plans to improve the availability of working capital to businesses in financial distress; and what assessment have they made of debtor-in-possession financing models such as those available in the United States.

The directors and managers of businesses are responsible for ensuring the availability of working capital, including at times of financial distress. A prudent board of directors will ensure that the balance sheet is strong enough to withstand a deterioration in trading conditions. Other options may include reducing or suspending the payment of dividends, raising fresh equity, postponing planned capital expenditure and negotiating an increase in borrowing facilities.

The Government has published its review of the Corporate Insolvency Framework consultation, which contained a package of proposals to improve the rescue opportunities for financially-distressed companies drawing on some of the features of the United States’ debtor-in-possession regime. The Government will set out the way forward for the proposals in its response later this year.