A pre-packaged sale in administration, whereby the sale of all or part of the business is arranged prior to the company entering formal insolvency and realised on or immediately after the appointment of the administrator, is a valuable business rescue tool. Pre-pack sales help to avoid a deterioration of the value of the company\u2019s business between appointment of the administrator and sale, meaning there is more money available for creditors, including the pension scheme. In most cases where pre-packs are used, the only alternative would be the collapse of the business and the loss of all employees\u2019 jobs.<\/p>
<\/p>
The government is aware of concerns about the transparency of pre-pack sales, particularly where a business is sold to a person connected with the old company. It is currently evaluating whether legislative measures are necessary to regulate pre-pack sales to a connected person, following a review of a package of voluntary industry measures implemented in 2015 to improve creditor confidence in pre-packs. As part of the review the government liaised with the Pension Protection Fund, which made clear in its response to concerns raised by the Chair of the Department of Work and Pensions Select Committee, that it does not fundamentally take issue with pre-packs but where there are concerns, these are referred to the Pensions Regulator for investigation.<\/p>"} , "answeringMember" : {"_about" : "http://data.parliament.uk/members/4487", "label" : {"_value" : "Biography information for Kelly Tolhurst"} } , "answeringMemberConstituency" : {"_value" : "Rochester and Strood"} , "answeringMemberPrinted" : {"_value" : "Kelly Tolhurst"} , "dateOfAnswer" : {"_value" : "2019-09-03", "_datatype" : "dateTime"} , "isMinisterialCorrection" : {"_value" : "false", "_datatype" : "boolean"} , "questionFirstAnswered" : [{"_value" : "2019-09-03T15:19:42.49Z", "_datatype" : "dateTime"} ]} , "answeringDeptId" : {"_value" : "201"} , "answeringDeptShortName" : {"_value" : "Business, Energy and Industrial Strategy"} , "answeringDeptSortName" : {"_value" : "Business, Energy and Industrial Strategy"} , "date" : {"_value" : "2019-07-24", "_datatype" : "dateTime"} , "hansardHeading" : {"_value" : "Insolvency"} , "houseId" : {"_value" : "1"} , "legislature" : [{"_about" : "http://data.parliament.uk/terms/25259", "prefLabel" : {"_value" : "House of Commons"} } ], "questionText" : "To ask the Secretary of State for Business, Energy and Industrial Strategy, if she will make an assessment of the potential for pre-packaged administrations to be open to abuse as a way of passing on pension liabilities to the Pension Protection Fund.", "registeredInterest" : {"_value" : "false", "_datatype" : "boolean"} , "tablingMember" : {"_about" : "http://data.parliament.uk/members/3973", "label" : {"_value" : "Biography information for Grahame Morris"} } , "tablingMemberConstituency" : {"_value" : "Easington"} , "tablingMemberPrinted" : [{"_value" : "Grahame Morris"} ], "uin" : "281706"} , {"_about" : "http://data.parliament.uk/resources/1141794", "AnsweringBody" : [{"_value" : "Department for Business, Energy and Industrial Strategy"} ], "answer" : {"_about" : "http://data.parliament.uk/resources/1141794/answer", "answerText" : {"_value" : "
The government has recently carried out a review of the impact of voluntary industry measures introduced in 2015 to improve confidence in pre-packaged sales in administration. The review will inform a decision on whether further regulation is required where a business is sold via a pre-pack sale to a person connected with the old company. We expect to publish the outcome of the review shortly.<\/p>
<\/p>
As part of the review the Government liaised with the Pension Protection Fund, which made clear in its response to concerns raised by the Chair of the DWP Select Committee, that it does not fundamentally take issue with pre-packs but where there are concerns, these are referred to The Pensions Regulator for investigation.<\/p>
<\/p>
The government already has robust measures in place to prevent directors of insolvent companies who are guilty of poor behaviour from taking part in the management of companies in the future. When a company enters a formal insolvency procedure, such as administration, the insolvency practitioner has a legal duty to report to the Insolvency Service on the conduct of the directors and where wrongdoing is identified, action can be taken to disqualify them for up to 15 years.<\/p>
<\/p>
The government response to the 2018 White Paper \u201cProtecting Defined Benefit Pension Schemes\u201d proposes additional powers for The Pensions Regulator with a tougher approach to the minority of employers whose irresponsible behaviour does put pension schemes at risk.<\/p>"} , "answeringMember" : {"_about" : "http://data.parliament.uk/members/4487", "label" : {"_value" : "Biography information for Kelly Tolhurst"} } , "answeringMemberConstituency" : {"_value" : "Rochester and Strood"} , "answeringMemberPrinted" : {"_value" : "Kelly Tolhurst"} , "dateOfAnswer" : {"_value" : "2019-09-09", "_datatype" : "dateTime"} , "isMinisterialCorrection" : {"_value" : "false", "_datatype" : "boolean"} , "questionFirstAnswered" : [{"_value" : "2019-09-09T07:37:17.093Z", "_datatype" : "dateTime"} ]} , "answeringDeptId" : {"_value" : "201"} , "answeringDeptShortName" : {"_value" : "Business, Energy and Industrial Strategy"} , "answeringDeptSortName" : {"_value" : "Business, Energy and Industrial Strategy"} , "date" : {"_value" : "2019-07-24", "_datatype" : "dateTime"} , "hansardHeading" : {"_value" : "Insolvency"} , "houseId" : {"_value" : "1"} , "legislature" : [{"_about" : "http://data.parliament.uk/terms/25259", "prefLabel" : {"_value" : "House of Commons"} } ], "questionText" : "To ask the Secretary of State for Business, Energy and Industrial Strategy, if she will review pre-packaged administration deals and make an assessment of the potential merits of preventing directors of a failed company becoming directors of the new company in cases where pension liabilities are passed onto the Pension Protection Fund.", "registeredInterest" : {"_value" : "false", "_datatype" : "boolean"} , "tablingMember" : {"_about" : "http://data.parliament.uk/members/3973", "label" : {"_value" : "Biography information for Grahame Morris"} } , "tablingMemberConstituency" : {"_value" : "Easington"} , "tablingMemberPrinted" : [{"_value" : "Grahame Morris"} ], "uin" : "281708"} ], "itemsPerPage" : 10, "page" : 0, "startIndex" : 1, "totalResults" : 2, "type" : ["http://purl.org/linked-data/api/vocab#ListEndpoint", "http://purl.org/linked-data/api/vocab#Page"]} }