What is Statement of Insolvency Practice 16 (SIP 16)?
SIPS are rules for insolvency practitioners to follow when working on insolvency cases. If they fail to abide these rules they can be fined or even lose their practice licence. So they're taken very seriously by the profession!
Every pre-pack administration (PPA) is being carefully scrutinised by the Insolvency Service after bad press and complaints from creditors that PPA does not maximise their interests. A common complaint is "How can it be fair that directors simply start again with the same business, the same name and no debt"?
So SIP 16 sets out the rules that must be used for PPA's.
The Insolvency Service has issued a statement saying it will use Statement of Insolvency Practice 16 to monitor pre-packs. The SIP requires the administrator to report to creditors on their actions as follows.
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