UK: PRE-PACK SALES TO FACE MANDATORY INDEPENDENT SCRUTINY

On 8 October, a news release from the Insolvency Service advised that new laws will require mandatory independent scrutiny of pre-pack administration sales where connected parties are involved in the purchase – such as the insolvent company’s existing directors or shareholders.  Pre-pack administrations involve arrangements to sell part or the whole of a company’s business or assets prior to the company entering into administration.  The sale is completed on or shortly after the appointment of an administrator and the speed of the transaction helps preserve the value of the business while saving jobs.  While pre-pack administration sales are widely considered to be a valuable rescue tool, concerns have been raised that arrangements may not always be in the best interests of creditors.  The release explains that the power to regulate connected party sales in administration lapsed in May 2020, but was revived by the Corporate Insolvency and Governance Act 2020, giving the Government powers to introduce regulation via affirmative secondary legislation.

https://www.gov.uk/government/news/pre-pack-sales-to-face-mandatory-independent-scrutiny

I had omitted the following link (as it did not seem to generate much interest!), but it seemed time to add it again and say that, if you would like to make a (polite) gesture and help me with my removal and computer costs, I have a page at https://www.buymeacoffee.com/KoIvM842y

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s