Administration – proposals to change rules

The Government has announced an intention to change rules relating to insolvency administration procedures by including measures to improve transparency in pre-pack administration sales. The minister, Ed Davey (Minister for Employment Relations, Consumers and Postal Affairs) announced on 31 March that: “In order to inject greater transparency into the process I intend to require administrators to give notice to creditors where they propose to sell a significant proportion of the assets of a company or its business to a connected party, in circumstances where there has been no open marketing of the assets. This will enable creditors to express concerns, which the administrator would need to consider, or to make a higher offer for the assets, and in cases where the circumstances justify it, apply to the court for injunctive relief. These options can be exercised before the sale has taken place, and therefore reflect concerns raised by stakeholders in their responses to the consultation.”