The Government is undertaking an assessment of the impact of the voluntary industry measures introduced in November 2015 to improve the transparency of connected party pre-pack sales in administration and will be contacting a variety of interested parties to seek their views.
The industry measures arose from the recommendations of the 2014 independent Graham Review, which found that pre-pack sales were a useful business rescue tool, but that there was evidence of less successful outcomes where the pre-pack sale was to a connected party.
As well as industry reforms, the Small Business, Enterprise and Employment Act 2015 created a power for Government to make regulations to impose conditions on property sales to connected parties in administration (including via a pre-pack). This power expires in May 2020.
The assessment will look at the impact of reforms on all connected party sales in administration and will help to inform decisions on whether further regulation is needed prior to the expiration of the regulation making power.
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