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Park Logistics - Creating supply Chain Solutions

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Government launches review of pre-pack administration rules

  • 15 July 2013
  • By Chris Tindall

A review of pre-pack administrations has been launched by the government after mounting concerns over the ease with which people can walk away from debt.

The independent review is expected to address the long term impact of pre-pack deals and to assess whether they cause detriment to any particular groups of creditors and specifically whether unsecured creditors are disadvantaged.

Details of the review are contained within a discussion paper announced this week by Business Secretary Vince Cable and entitled Transparency and Trust.

The paper also contains a number of proposals such as abolishing corporate directors, where companies are listed as directors at Companies House, and whether courts can make compensation awards against directors when making a disqualification order.

The Department for Business, Innovation and Skills said there were 728 pre-packs during 2012, representing 29% of all administrations.

One creditor, who said it never received all of the £18,000 owed to it by Assured Logistics Solutions after it was sold in a pre-pack arrangement in 2011, added that it felt obliged to work for the new company just to try and claw back the money:

“It’s a carrot you find dangled in front of you and you think, at least we can recoup something,” he said. “You overcharge, if you can, but when it’s large amounts of money you are never going to get it all.”


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