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The end of the pre-pack?

The end of the pre-pack?

Following on from our article in the newsletter, as predicted (not just by us!) the pre-pack practice is to come under scrutiny.  The Department for Business, Innovation and Skills are to review pre-pack administration later in the spring, after controversies surrounding the insolvency vehicle which seemingly leaves creditors with little to recoup.  There is no doubt that pre-packs can be effective in preserving value and safeguarding jobs (at least temporarily), but whether creditors get the best deal is less clear.  The government is taking action following concerns voiced by creditors, and is looking into making the process more transparent.  The problem is not in the increased volume of pre-packs (proportion of administrations not increasing) but in the lack of information and the suspicions of abuse (we aren’t pointing any fingers ourselves!).

Watch this space!

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