The power to regulate connected party sales in administration was introduced by the Small Business, Enterprise Employment Act 2015 and revived by the Corporate Insolvency and Governance Act 2020. The Government proposes to exercise the power to require mandatory independent scrutiny of connected person sales, unless there has been creditor approval of the transaction.
Government sought views from stakeholders to produce draft regulations which have been published alongside a report announcing the outcome of the Insolvency Service’s review into the impact of voluntary measures introduced in November 2015 following the 2014 review by Teresa Graham1, to improve transparency and confidence in pre-pack sales in administration.
Regulations will be made as soon as Parliamentary time allows. The Government also proposes to work with industry on non-legislative reforms to strengthen the existingprofessional standards around pre-packs.
The full report on the outcome of the Insolvency Service review and the draft regulations can be found here:
If insolvency practitioners wish to make any comments on the draft regulations, please e-mail these to Prefirstname.lastname@example.org