Crisis highlights snags

THE ANGLO-GERMAN corporate crisis at Lancer Boss has brought to a head the lack of cross-border agreements on business rescues between European Union partners, writes John Willcock.

Allan Griffiths, British receiver of Lancer Boss, was yesterday making desperate efforts to contact his opposite number in Bavaria, a lawyer appointed by the German courts to supervise Steinbock Boss.

Bankers and insolvency specialists are concerned that the two men sent in to sort out the mess are working under completely different laws.

The Lancer Boss case will be top of the agenda at a United Nations conference in Vienna next week on international trade and bankruptcy treaties. It will discuss the third draft of a long-awaited European Bankruptcy Convention, which according to UK lawyers may ignore British rescue schemes such as receivership.

In a confrontation where the interests of the company's British backers, led by NatWest and Standard Chartered, may well clash with those of the German banks, led by Bayerische Hypo-Bank, deep- set cultural differences and a lack of common legal ground will make any rescue agreement difficult.

British insolvency experts are already hardened to the absence of any European business rescue agreements. Michael Prior, of the lawyers Nabarro Nathanson, has for many years led British efforts to construct a European insolvency treaty and will be speaking at the Vienna conference.

He warned that the British receiver's relationship with the Germans would face difficulties because Mr Griffiths has been appointed specifically to enforce a floating charge, a concept that does not exist in Germany. His opposite number is a lawyer appointed by the court, whereas Mr Griffiths is an accountant appointed on behalf of Lancer Boss's banks.

As such the German courts will view him as an agent for the British side of the company, and therefore the British banks, rather than an impartial rescue partner.