The changes to the rules have the noble goal of making pre-pack deals more transparent, forcing administrators to give creditors notice (only three days, admittedly) and ultimately giving creditors a voice to potentially block pre-pack sales;
brilliant news. Sort of.

As with any announcement of this sort, the devil is in the detail and right now there’s not a lot of the latter. That’s not to say the proposed changes will have no impact, but the problem will inevitably be the same as it is with The Insolvency Services’ (IS) Statement of Insolvency Practice 16 (SIP 16): not everyone plays ball.

Coinciding with the proposal to change the pre-pack rules, IS released some statistics on how many of the 769 SIP 16 files on pre-pack sales submitted were fully compliant – funnily enough there was no mention of the number of deals that didn’t submit a SIP 16 report.

The good news is that last year the number of compliant cases was up from 62% in 2009 to 75% – the bad news, unsurprisingly, was that a quarter (or 192) of pre-pack sales weren’t compliant.

More worrying was the fact that only 13 cases were referred for further investigation. This equates to 1.7% of the total number of pre-pack administration sales that submitted SIP 16 reports.

Now, I fully accept that, under some circumstances, a pre-pack sale, even if it is to previous directors, can offer the best return for creditors, secure jobs and is therefore on occasions completely justifiable.

But only 1.7% warranted further investigation..? Seriously?