The FCA's approach to the compromise of claims
The Financial Conduct Authority has recently published a consultation on proposed new guidance for regulated entities who seek to compromise creditor claims. The introduction of redress schemes has led to a number of regulated entities being faced with financial stress and therefore an increase in the consideration by such firms of the available creditor compromise processes, such as schemes of arrangement and restructuring plans. The recent cases of Provident Finance and Amigo Loans has highlighted the approach the FCA has taken and has led to the FCA seeking to be transparent in its expectations where these processes are proposed. In the R3 Recovery magazine Emma Sadler and Steven Francis consider the difficulties that face management teams of regulated entities when dealing with creditor compromises within the financial services sector. We have recent experience of advising in this area so please contact us for further details.