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The Government has confirmed that:
The new rules on “connected persons” insolvency sales and pre-packs came into force at the end of April. The Administration (Restrictions on Disposal etc to Connected Persons) Regulations 2021 provide that an administrator “must not” make a “substantial disposal” to “connected persons” within the first 8 weeks of the administration without creditor approval or obtaining a “qualifying report” from an “evaluator”. The regulations are accompanied by non-binding guidance published by the Insolvency Service.
We suspect that many insolvency sales and pre-packs will opt to use an evaluator rather than seeking creditor approval (as there are uncertainties in that process). This also seems likely given how the Pre-Pack Pool is looking to reposition itself as the evaluator of choice, certainly in the larger, more complex transactions.
The Insolvency Service will be given powers to investigate directors of companies that have been dissolved without first having become insolvent, acting as a strong deterrent against the misuse of the dissolution process.
The new measures are included in the Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill and will be retrospective in relation both to the conduct of directors occurring and to companies dissolved at any time before, as well as after, the passing of the Act. The legislation will mean that a company will not need to be restored before action can be brought against a director.