Cleaning up pre-packs
The Steering Group establishing the pool of experienced business people who review pre-pack sale agreements have written to the Business Secretary to update him on progress.
To increase transparency in pre-packs last summer better regulation expert Teresa Graham recommended that creditor and insolvency organisations should develop a process to independently scrutinise sales to connected parties.
This recommendation is being taken forward by a steering group of representatives from the Chartered Institute of Credit Management, British Property Federation, Institute of Directors, Association of Business Recovery Professionals (R3), Institute of Chartered Accountants in England and Wales, Chartered Accountants Ireland, Association of Chartered Certified Accountants, Insolvency Practitioners Association and the Institute of Chartered Accountants of Scotland.
It is expected that pool will begin scrutinising sales to connected parties in the summer. A new statement of insolvency practice (SIP16) will come into force at the same time. The new statement of insolvency practice will introduce requirements for insolvency practitioners to disclose to creditors additional information about pre-pack sales, particularly on the marketing and valuation of businesses.