Pre-pack Administrations

Statement of Insolvency Practice 16.

Concern about misuse of pre-pack administrations has lead to the introduction of Statement of Insolvency Practice 16, with effect from 1 January 2009. The statement requires administrators to disclose certain information to creditors in all cases where there has been a pre-packaged sale (i.e. where the intended administrators negotiate a sale of all or majority of the company’s assets in advance of their appointment).

Following the introduction of the statement, administrators must now disclose to creditors, amongst other things, why they consider a pre-pack will represent the best outcome for creditors, the price being paid, the name of the purchaser of the business and any connection between the purchaser and the directors and shareholders of the company in administration.

For more information on insolvency contact Judith Bell:

Direct Dial: 01453 700621
Email: judith.bell@loxleylegal.com