The Draft Pre-Pack Regulations: Who Evaluates The Evaluator?

On 24 February 2021, the government published new draft Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021 (the Regulations), following the consultation process conducted in late 2020. The Regulations are still to be debated by Parliament, but are expected to come into effect on 30 April 2021 with few substantive amendments.

The Regulations will apply in circumstances where an administrator is proposing to make a substantial disposal of a company's business and assets to a connected party within eight weeks of their appointment. The Regulations can be seen here.

While the Regulations are clearly intended to address the often wide-spread concern that administration sales to connected parties - and particularly "pre-pack" sales - lack sufficient transparency to reassure creditors that the sale is in their best interests (as considered in our earlier article), many question the tangible impact that the Regulations are likely to have