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New pre-pack guidelines come into force
New guidelines aimed at making the pre-pack administration process more transparent have come into force.
Pre-pack deals, where a company is immediately bought out of administration by a pre-arranged buyer, have dominated M&A in the print industry over the past 12 months leaving many creditors angry and out of pocket.
Detractors of pre-pack deals claim that best value for creditors is often not realised as administrators do not have the opportunity to test the market and search out the best offer.
Those in favour argue that it is often the only way to sell a business as a going concern and preserve the jobs of those working for the failed business.
However, from 1 January 2009, administrators should be more transparent about the sale process. In particular they should reveal why a pre-pack was the best option, providing creditors with details of rival bidders, the price paid, and, crucially, any connections that the new directors had with the former company.
The new guidelines, contained within the Statement of Insolvency Practice number 16 (SIP 16), have been hailed by the Insolvency Service as bringing greater clarity to the administration process.
Graham Horne, deputy chief executive, of the Insolvency Service said: "Pre-packs can be a good thing, as we agree with the view that in some circumstances they will improve returns to creditors. In addition they can help to preserve the business of the failed company, thereby saving jobs.
"However, we will be working closely with the bodies that regulate administrators to ensure that SIP 16 is put into practice. We will also be looking to use our enforcement powers to clamp down on any directors who misuse the administration process to disadvantage creditors or seek to gain benefit for themselves."
Comments
Inky Fingers - 05 January 2009
'Take on board a successful, skilled and experienced Non Executive Director who will help your organisation and the personnel to be successful.'
Are you looking for a job Colin!!
Brian Kemp - 05 January 2009
SIP 16 is no more than lip service. It has changed nothing. Administrators; as officers of the Court are already under an obligation to procure the best deal for all stakeholders and they must, at least notionally, be able to justify their actions. These PR exercises are a waste of time, what is needed is a fully thought our Chapter 11 system.
The Mighty wind - 06 January 2009
The minute administrators enter a building the true rip offs begin and something akin to a viking raid on all the assets takes place.
victor meldrew - 06 January 2009
'Take on board a successful, skilled and experienced Non Executive Director who will help your organisation and the personnel to be successful.'
Are you looking for a job Colin!!
Those who can do, Those who can't teach, isn't that right Colin?
NDCT - 07 January 2009
Despite having had dozens of posts deleted yesterday (and rightly so) Colin returns with his abysmal sales pitch yet again.
Do you suffer from a serious social disorder Colin?
victor meldrew - 07 January 2009
is being a prat a social disorder?
COLIN THOMPSON - 07 January 2009
`I found it easier to get rich than I did to make excuses.`
Colin Thompson
Cavendish
www.cavendish-mr.org.uk
Lena Johansson - 08 January 2009
Looking at pre-pack deals as a wonderful solution to save jobs and safeguard employment in the failed business seems a bit shortsighted. Once the debts have been jettisoned and the the creditors end up unpaid, the problem is simply shifted along to other companies who will then struggle and maybe collapse. Also, it has been shown that pre-pack deals involving a buy back by members of the original management team have a failure rate of about 45%. If suppliers refused to deal with phoenix companies the pre-pack route may be less attractive.
Alan Partridge - 08 January 2009
Colin, I'm sure perseverance', determination', 'business winning mentality', etc, are all words and phrases that feature all to often in your 'winning b*llsh*t formula' training sessions. You obviously practice what you preach, but tell me this: HAVE YOU EVER GENERATED A LEAD FROM THIS WEBSITE?
If the answer, as I suspect, is no, do you think it could be time to throw in the towel and try a more conventional method of attracting business?
I personally have found you, your posts, and the fallout which usually follows to be quite amusing over the last few months, but It's actually becoming quite disturbing. I'd seriously really like an answer to my question above if it's no trouble.. I'm genuinely interested and am sure I'm not alone.
Colin Thompson - 08 January 2009
I share my views and complimentary reports to whom wish to read them. Also, sharing my successful business solutions may help other businesses.
Also, I use my name and details so people know who expresses the views.
Colin Thompson
Cavendish
www.cavendush-mr.org.uk
The Voice of Reason - 08 January 2009
Errrrr, but nobody wants to read them Colin.
The Voice of Reason - 09 January 2009
just pointing out to everyone that the person posting under the name Voice of Reason with a join date of 06 01 09 and no avatar is an interloper and a scoundrel. I say to this person "find your own bloody pen name".
Alan Partridge - 09 January 2009
Thanks Colin, but have your posts ever actually drummed up any business which I assume is the reason for you writing them?
I'm just interested thats all; all I I've ever seen is people being offended and antagonised by them
NDCT - 09 January 2009
Colin has obviously had his ID and posts deleted several times by the moderators and yet he simply signs up again and starts posting the same thing. That is very strange behaviour. Would anyone want to employ someone whose emotional IQ and interpersonal relationships were so low? I genuinely DO think he needs professional help. This sort of behaviour usually gets ironed out by the time a child reaches seven years old.
WJM - 14 January 2009
I am not having any particular commercial problems right now but I was really excited by this new government approved scheme whereby I can periodically dump a load of my debt by doing a simple on-paper restructure. Very exciting! The money is better off in my back pocket than in the hands of these paper merchants and consumable suppliers. Obviously, I am not going to mess my asset lenders around, repossession of kit is a bad thing but consumable suppliers are ten-a-penny and they love to support phoenixing, oooopps I mean pre-packing - silly me!!! At least I was thinking about doing this before I remembered that it was an immoral but legal form of theft and I though it might be nice to cling to some shred of dignity. I am so old fashioned me :-)
Ink on Paper - 14 January 2009
Well WJM I think you have outlined the perfect business model for 2009. Unfortunately it seems that the morally bankrupt amongst us are implementing it!!
WJM - 15 January 2009
Well black is the new white! - Would Printweek like to explain why they always report Phoenixes / Pre-Packs in such a positive light when the reality is that the business involved has stolen from our supplier base and left the rest of us to pay for the theft through increased prices? How much cheaper would paper be if the merchants didn't have the overhead of obscene levels of bad debt provision?
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