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ARTICLE · 22 MAY 2023

Pre-Pack Regulation: Two Years On

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It is now two years since the 30 April 2021 introduction of the Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021 (the "Regulations")...

United KingdomInsolvency/Bankruptcy/Re-Structuring
Sonya Van de Graaff
Sonya Van de Graaff
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It is now two years since the 30 April 2021 introduction of the Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021 (the "Regulations") and a good time to look back at whether the Regulations have achieved their purpose, what issues remain and what the next two years might look like.

Summary

  • The Regulations came into force on 30 April 2021 with the intention of addressing concerns around pre-pack administration sales to connected persons.
  • Previously, there was a voluntary obligation to have a sale to a connected person considered by the 'pre-pack pool.'
  • The Regulations compel administrators, who are intending to engage in disposals to connected persons, to first obtain either creditor approval or a qualifying report from an independent evaluator (such report being commissioned and paid for by the connected buyer).

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