draft legislation<\/a> will implement the requirement for \u201cmandatory independent scrutiny\u201d of pre-pack administration sales \u201cwhere connected parties are involved in the purchase\u201d.<\/p>\nA pre-pack administration is a type of insolvency procedure involving the sale of a company and its assets before appointing administrators to facilitate the transaction, speeding up the process to help preserve the value of the business while also rescuing jobs.<\/p>\n
However, a study published last year found that pre-pack administrations \u201cmay not always be in the best interests of creditors\u201d where sales include transactions between company directors and shareholders.<\/p>\n
Minister for Corporate Responsibility Lord Callanan said the new laws will \u201cimprove confidence and transparency\u201d in pre-pack administration sales and ensure creditors that they are getting the best deal.<\/p>\n
Commenting on the legislation, Minister for Corporate Responsibility Lord Callanan said: \u201cPre-pack sales play an important role in rescuing viable businesses, while protecting jobs and supporting our economy.<\/p>\n
\u201cThis new law will ensure all sales to connected parties are properly scrutinized – protecting the interests of creditors and the general public, as well as the distressed company.\u201d<\/p>\n
Welcoming the news, Colin Haig, President of insolvency and restructuring trade body R3, added: \u201cThe insolvency and restructuring profession is very sensitive to the impact of pre-packs on creditors, and there is a careful balance to strike in these situations between transparency, protecting creditor value, and business rescue, which these proposals support.\u201d<\/p>\n
For help and advice with related matters, please get in touch with our expert team today.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"New legislation will require independent scrutiny of pre-pack sales where connected parties are involved, it has been announced.<\/p>\n","protected":false},"author":2,"featured_media":3978,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,30,73,65,25,4,26],"tags":[],"_links":{"self":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/3976"}],"collection":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=3976"}],"version-history":[{"count":1,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/3976\/revisions"}],"predecessor-version":[{"id":3977,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/3976\/revisions\/3977"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media\/3978"}],"wp:attachment":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=3976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=3976"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=3976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}