After the noise and concern in 2015 about SIP 16 and the prepack pool, information has started to come forward about what this means in practical, day to day terms.
As regards the prepack pool – and it is of course for the directors of a company in administration, or facing administration, and that is proposing a prepack to submit an application to the prepack pool if they wish – the best comments have been from an insolvency practitioner who told me that ‘From our point of view it was dead simple, just a case of sending a standard letter and having a five minute chat with the director submitting the application’. The response from the prepack pool was prompt and did not cause any problems.
The same insolvency practitioner (who gave his consent to the quoting of his comments) noted that the prepack pool:-
- Took very little effort on my part
- Helped reinforce to the directors that their offer will be independently reviewed, which helped in the negotiations for a sensible deal
- Made it harder for directors to move the goal posts as the administrator could point out that the offer had already been reviewed
- Made the job of managing creditors’ expectations easier
- Gave the administrator an extra two days to try and progress another bidder
The last point could only have been made by an experienced insolvency practitioner making the best commercial deal out of any situation.
Insolvency practitioners face even more changes in legislation in 2016. The idea of working with the prepack pool is now part of life for insolvency practitioners, and a part of life ‘that took very little effort on my part’.
If you have any queries about this or any other aspect of insolvency legislation or compliance please do not hesitate to call me or send me an email.
Caroline Clarks insolvency career started over 30 years ago and since 1994 RMCS has been handling insolvency compliance, specialising in regulation and compliance.
Contact: Caroline Clark
M: 07854 967976