Oral question asked in the House of Lords, by Baroness Gardner of Parkes (Conservative). It was answered by Baroness Vadera (Labour) on Tuesday, 23 June 2009.

Insolvency

Question: To ask Her Majesty’s Government what assessment they have made of the impact of using pre-packaged administrations (pre-packs) in undisclosed insolvency proceedings on small- and medium-sized enterprises which are suppliers to businesses restructured in this way; and whether they have any proposals for greater transparency or minimum disclosure.

Answer: My Lords, in the right circumstances pre-packaged administration can deliver benefits by saving troubled businesses, thus preserving value that would otherwise be lost. It can potentially be more effective at saving jobs than other types of administration. However, it is important that the system is monitored and not subject to abuse. On 1 January 2009, we introduced mandatory requirements for administrators to report to creditors on all aspects of a pre-pack as soon as possible. These arrangements are being actively policed by the Insolvency Service, which is examining every pre-pack report it receives, and will publish a report before the Summer Recess.

Secondary information

Type: Oral question
Reference: 711 c1457-8
Session: 2008-09
Oral question type: Lead
Chamber / Committee: House of Lords chamber
Subjects: Disclosure of information Business Credit Insolvency Small businesses
Link: View this Oral question on www.publications.parliament.uk