The Insolvency Service has published its long awaited report into pre-packaged administrations. The report is entitled: Report on the First Six Months' Operation of Statement of Insolvency Practice 16, Insolvency Service, 20 July 2009. Press comment has been mixed so far with the Times leading with "Accountants behind pre-pack bankrupt deals are mocking rules, says report". See also "Not-so-sweet smell of insolvency excess." Unsurprisingly, R3 are more positive. They note:
The main conclusions of the report are:
"The Insolvency Service is satisfied that SIP 16 does improve transparency for creditors and that, properly applied, the SIP will ensure creditors receive the information they need to decide whether any given pre-pack sale was in their best interests. It should be borne in mind that these are early days for the operation of SIP 16 and insolvency practitioners are still learning the full implications of the SIP for their reporting to creditors. We also have no evidence that the pre-pack process is being systematically abused by directors to materially disadvantage creditors. A further report on the operation of the SIP will be published in early 2010."
Picture Credit: Insolvency Service, 2009.