Pre-pack reforms delayed

Pre-pack reforms delayed

Quick insolvency process reforms put back until 2012

RADICAL CHANGES to pre-pack administrations have been delayed, the Insolvency Service has confirmed.

The highly criticised process involves marketing a business prior to it entering administration and selling immediately thereafter. A company can also be sold back to the directors or previous owners.

The government minister responsible for insolvency, Ed Davey (pictured), had previously claimed the overhaul would take effect before the end of the year.

However, the Insolvency Service confirmed it will not come into effect until next year. Sources close to the issue claim April is when changes are likely to take place, as historically it is the favoured month for insolvency-related updates.

“Following discussions with stakeholders, amendments are being made to the Statutory Instrument (SI) by our lawyers. The SI will not be coming into force by the end of this year and we are now aiming for next year.

“We have endeavoured to take note of representations from all sides of the debate,” an Insolvency Service spokesman said.

The reform will see creditors given three days’ notice if a company is sold to a connected party.

Insolvency experts have warned that slowing the rapid turnaround insolvency procedure could end up handicapping a valuable tool and lead to increased company collapses.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource