Introducing the Pre-Pack Pool

The Pool is an independent body of experienced business people set up in response to a series of recommendations contained in the Teresa Graham report on pre-packaged administrations. The Pool member will offer an opinion on the purchase of a business and/or its assets by connected parties to a company where a pre-packaged sale is to be proposed by an administrator. Only one member of the Pool will deal with an application. If viewed favourably, the Pool member will issue a response to the effect that it is not in his/her opinion unreasonable to proceed.

Giving an independent report on prepack administration sales to connected parties

Your pre-pack evaluation report for £1,750.00 + VAT (fixed price)

Why you should use the Pre-Pack Pool for your connected party pre-pack evaluation

Pre-Pack Pool:

The Pre-Pack Pool (The Pool) is uniquely positioned to be able to meet the requirements of the Regulations, having an experienced and professional team of Evaluators. The Pool has been providing a similar service under the previous voluntary regime for over 5 years. In doing so, The Pool has always been mindful of the often-critical timelines involved in these sales and has played its part in preserving businesses and jobs by ensuring that it responds to referrals within its target of 48 hours, often doing so inside 24hrs where all the required information is provided. The guidance elsewhere on this website will be helpful to applicants when submitting information for evaluation.

Also The Pools evaluators are covered by corporate Professional Indemnity Insurance, and The Pools fees are fixed to provide certainty for applicants.

The Pool is determined to provide a professional and independent evaluation service, supporting the insolvency profession in rescuing viable businesses, and aiming to give creditors the assurance that where pre-pack sales to connected parties are undertaken, they have been entered into reasonably and with due regard to creditors’ interests.

Current legislation

Evaluation of Connected Party Pre-Pack Sales

Regulations:

Under recently announced Regulations [The Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021], any disposal of a substantial part of an insolvent company’s assets to a connected person via an administration, within a period of 8 weeks from an Administrator’s appointment, must now be referred to an independent Evaluator. The connected party must obtain a report from the Evaluator and supply this to the Administrator in support of the offer.

A purchasing party is regarded as connected for these purposes where a director of the insolvent company (or an associate, such as a relative or business partner, of such a director) is involved in the business of the prospective purchaser. This could include certain classes of secured creditors. The definition of Connected Person includes directors, shadow directors or other officers of the insolvent company, associates (other than employees), as well as connected companies (where a relevant person in respect of one of the companies is, or has been, a relevant person in respect of the other).

The Evaluator must identify the relevant assets / property being acquired, the consideration to be paid by the purchaser, and identify the connected party (and their connection).

Report:

In the required report from the Evaluator, there are two options; they can state either that: - they are satisfied that the consideration for the property and grounds for disposal are “reasonable in the circumstances” (case made); or - they are not satisfied that such consideration is reasonable (case not made). Upon receiving a report, the Administrator should be satisfied that the Evaluator has sufficient knowledge and experience to produce the report and that the Evaluator holds Professional Indemnity Insurance cover to enable them to act. The report will be sent by the Administrator to all creditors and filed with the Registrar of Companies (Companies House).