ARTICLE · 09 NOVEMBER 2013

Pre-Pack Administrations: The New SIP16 is Now In Force

Reed Smith (Worldwide)

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An updated Statement of Insolvency Practice (SIP) relating to pre-packaged sales in administrations has been issued by the Joint Insolvency Committee, effective from 1 November 2013.

United KingdomInsolvency/Bankruptcy/Re-Structuring

Charlotte Møller

Estelle Victory

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An updated Statement of Insolvency Practice (SIP) relating to pre-packaged sales in administrations has been issued by the Joint Insolvency Committee, effective from 1 November 2013. The new SIP aims to provide greater clarity for creditors, with insolvency practitioners (IPs) having to provide earlier notification of the pre-packaged sale and more detail as to the circumstances surrounding, and terms of, the sale transaction.

Many of the changes implemented have already been seen in the Insolvency Service's "Dear IP" guidance in 2009, but these points are now contained within the updated SIP itself, and the Dear IP guidance will be consequently withdrawn.

In particular:

The administrator should provide creditors with a detailed narrative explanation and justification of the sale to demonstrate that they have acted with due regard for the interests of the creditors. Such information should be provided with the first notification to creditors and in any event

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