BusinessBusiness RecoveryDon’t kill off pre-packs, says insolvency chief

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

KPMG's restructuring chief Richard Fleming insists pre-packs are an 'important tool' for the insolvency practitioner

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

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.”

Related Articles

CVR Global sells DMG Steelworkers out of administration in pre-pack deal

Accounting Firms CVR Global sells DMG Steelworkers out of administration in pre-pack deal

1y Richard Crump, Writer
Unpacking the Pre-Pack Pool

Business Recovery Unpacking the Pre-Pack Pool

1y Chris Warmoll, Writer
Devon firm saved from administration in connected party pre-pack deal

Accounting Firms Devon firm saved from administration in connected party pre-pack deal

2y Fraser Simpson, Reporter
Begbies snaps up P&A Partnership in pre-pack deal

Accounting Firms Begbies snaps up P&A Partnership in pre-pack deal

2y Richard Crump, Writer
Hellas liquidator to push EY for compensation over botched administration

Accounting Firms Hellas liquidator to push EY for compensation over botched administration

2y Richard Crump, Writer
The Pre Pack Pool: problem-prone, time-consuming, costly and pointless

Business Recovery The Pre Pack Pool: problem-prone, time-consuming, costly and pointless

2y Accountancy Age, Reporters
Ben Sherman in pre-pack deal

Business Recovery Ben Sherman in pre-pack deal

2y Chris Warmoll, Writer
Controversial pre-pack reforms begin

Business Recovery Controversial pre-pack reforms begin

2y Richard Crump, Writer