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The Insolvency Service (IS) has issued a Consultation Paper/Call for evidence entitled: "Consultation/Call for evidence Improving the transparency of, and confidence in, pre-packaged sales in administrations." The options for pre-pack reform that the IS has identified are:
"1. No change. All options will be considered against the alternative of
making no regulatory change. Some changes to the Insolvency Rules
1986 that will come into force on 6th April may incentivise insolvency
practitioners to provide fuller details of their pre-appointment work when
involved with pre-pack sales.
2. Giving statutory force to the disclosure requirements currently in
Statement of Insolvency Practice (SIP) 16 (Pre-packaged sales in
administrations), and providing penalties for non-compliance.
3. Following a pre-pack administration, restrict exit to compulsory liquidation,
so as to achieve automatic scrutiny of the directors’ and administrators’
actions by the Official Receiver.
4. Require different insolvency practitioners to undertake pre and postadministration
5. Require the approval of the court or creditors, or both, for the approval for
all pre-pack business sales to connected parties."
The deadline for submissions is the 24th June 2010.
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...