Insolvency laws in UK just not up to the job

But the world has moved on. The greater sophistication of the debt markets and the boom in private equity and leveraged buy-outs mean that companies which are in need of financial restructuring today often have capital structures of quite bewildering complexity.

No one knows who is in charge, or who has what rights. What they do know is that it is often in the interests of the majority of creditors to restructure the debt and keep the business going. But it is not clear how the majority voice can make itself heard.

Four Seasons, the care home business, is a case in point. It was a ludicrously over-ambitious private equity deal of which its architects should be truly ashamed, because roughly £100 million of earnings was expected to support more than £1 billion of debt.

That debt comes in 12 different tranches, each with different rights and obligations from senior bonds down to piks - payment in kind notes. The debt holders make strange bedfellows too, from Royal Bank of Scotland through to hedge funds.

This is a business that has more than 20,000 employees caring for thousands of elderly residents in scores of homes. It makes an operating profit but has been sunk by its financial structure, so somehow it has to be kept going while debt is swapped for equity.

But how do all those 12 different classes of debtor, to say nothing of the shareholders, decide how they will share the pain - or indeed how they will value the surviving business? They might be able to agree among themselves, and even persuade the shareholders that they are turkeys who should vote for Christmas. We shall see.

But it is also easy to have sympathy for the High Yield Association which argues that it would be administratively an awful lot easier if such complex big company restructuring was governed by the law, administered by the courts and there was a judge on call to bang heads together when needed.

Tape issue calls for strong nerves

The stockbrokers' trade association Apcims gave the great and the good of the Financial Services Authority a hard time yesterday morning at the regulator's annual public meeting - and they were particularly vexed about how much harder it is to keep track of share prices now there are so many venues on which the shares are dealt - and with the prospect of more to come.

International investment banks can afford the technology to keep abreast of everything as and where it happens, as they are obliged to do so they can be sure of providing their clients with the best possible prices.

But it is a big and costly stretch for a small private client focused firm. So Apcims wants the regulator to demand or facilitate the provision of a consolidated tape - one data feed bearing all share prices no matter where from.

Whether this is a reasonable thing to ask is a moot point, and it seems premature to demand FSA intervention before markets have had an opportunity to find their own answers.

But having said that, the consolidated tape debate is becoming vigorous between those who want it and those like the London Stock Exchange who don't - so the FSA will need strong nerves to stay on the sidelines.

The consolidated tape is one of those things that seem superficially attractive, but the devil is in the detail. Thus the LSE is not just being Luddite in its opposition, though it possibly feels it has most to lose.

But there is no reason why it, as a commercial organisation, should want to make it easy for new rival markets to piggy-back on its tape.

But there is another more valid danger. The standards applied to data by markets are so varied that true price comparison will continue to be difficult. Worse, there is a danger that the integrity of the whole tape would be undermined. This is a real risk. Witness the complaints of investors in the US, who are far from happy with the quality of information on the consolidated tape operating there.