The government has announced that pre pack sales to connected parties will be scrutinised independently.
Eleanor Temple, chair of insolvency and restructuring trade body, R3 in Yorkshire and a barrister at Kings Chambers in Leeds said:
“Having agreed that it should be mandatory for sales to connected party purchasers in pre-packs to be referred for an independent opinion, we broadly welcome the Government’s announcement. In particular, the Government’s decision not to ban sales to connected parties in pre-packs is the right one."
The problem with getting a second opinion as to whether connected parties are right and proper to take over the business are many. Here is the list:
- Will take time and speed is vital to stop a sudden meltdown of value
- Who will these independent people be?
- If they decide they are not fit what happens next ? - most likely the business will go into liquidation.
: Pre Pack Administration Process and Procedures