Pre-pack Pool
The Pre-pack Pool, one of the recommendations from Teresa Graham’s report into pre-pack administrations, is now open.
What is the Pre-pack Pool
It’s an independent body of experienced business people who will offer an opinion on the purchase of a business and/or its assets by connected parties where a company is going into administration and where a pre-packaged sale is proposed.
The aims of the Pool are to:
- increase the transparency of the pre-pack process in cases involving connected parties;
- to provide assurance for creditors that independent business experts have reviewed the proposed transaction.
How the Pool will work?
The connected party will make an application to the Pool via a secure, online portal. Based on the information submitted, the independent Pre-pack Pool reviewer will issue one of three opinions:
- The pre-pack is not unreasonable.
- The case for a pre-pack is not unreasonable but there are minor limitations in the evidence provided.
- The case for a pre-pack hasn't been made.
The Pool, operated by Pre-pack Pool Limited, works on a user pays principle. The process will cost £800 + VAT per application.
Insolvency practitioners (IPs) will need to make sure connected parties considering the acquisition of a company’s business or assets through a pre-pack purchase are aware of their ability to approach the Pre-pack Pool.
The process will allow applicants to agree to the opinion being sent to the administrator automatically. IPs may want to encourage applicants to do so, to facilitate disclosure in the administrator’s SIP 16 statement.