Don't kill off pre-packs, says insolvency chief

by Gavin Hinks

More from this author

05 Apr 2011

  • Comments
Richard Fleming

THE MOST senior insolvency practitioner at KPMG has publicly warned against reform that could see the controversial "pre-pack" administrations removed from the armoury of business recovery experts.

In a letter published in the Financial Times Richard Fleming, head of restructuring at KPMG (pictured above), said: "It would be a step backwards for the insolvency regime if the pre-pack mechanism were lost through best-intentioned efforts to eradicate system abuse."

Pre-packs see failing companies enter administration and sold to buyers almost simultaneously. They have been accused of being open to abuse and allowing the 'phoenixing' of ailing businesses where directors use the process to avoid debt.

Last week, proposals for reforming pre-packs emerged from the department of business. They include time for creditors to oppose a connected-party sale and making public the obligatory reports that follow each pre-pack. Currently the reports only go to creditors and the Insolvency Service.

Fleming said: "Pre-packs are an important and effective tool in the insolvency practitioner's kit: protecting fragile business value and saving jobs."

He adds: "Of course of the challenge in any reform is to ensure the cirrect balance is struck."

Visitor comments

blog comments powered by Disqus
display:none

Add your comment

We won't publish your address


By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication

Submit
  • Send

Manager / Senior Accountant - ACA or ACCA Qualified

WavelengthWavelength - Northampton - c£35K - £42K

 
 
 
 
 
 
 
 

 

Newsletters

Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials

Careers

Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you

Briefings

budget-management

Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.

cchcover

iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.