R3 welcomes Government's announcement on pre-pack regulation
“We welcome the Government’s decision to reconsider additional pre-pack legislation. The Government originally announced they would give creditors a three day notice period when selling a business to a connected party. A pre-pack is chosen due to the speed of the procedure which helps preserve the value of the business. The changes would have led to more businesses closing, job losses and unsecured creditors losing out as more businesses would have been liquidated instead of pre-packed.
“We are pleased Government has listened to the fact that improvements to the current pre-pack regime can be achieved through tweaks to the existing regulatory framework instead of additional regulatory burdens which would cause harm to businesses and their employees. R3 has been vocal about the effect these proposals would have on micro businesses and SMEs, which the Government has now recognised.
“R3 welcomes increased transparency and confidence in the pre-pack process and looks forward to working with Government to address creditor concerns surrounding pre-packs. Pre-packs are a vital rescue tool which fare considerably better than alternatives in terms of the retention of jobs and returns to secured creditors; this is crucial as the UK economy heads closer to another recession after the 0.2% decline in the UK's economic output.
“We also urge the Government to define ‘admin expenses’ which would help save thousands of jobs and businesses that enter administration every year. R3 has long campaigned for the implementation of legislation to clarify an administration expense to improve the UK’s business rescue culture.”
Frances Coulson, R3 President
For further information please contact:
Charlotte Towerton, External Communications Officer
T: 020 7566 4203 m: 07918 161 219 e: firstname.lastname@example.org
Antoinette Huka, Communications Officer
T : 020 7566 4217 m: 07825 679 462 e: email@example.com
Notes to editors:
- R3 is the trade body for Insolvency Professionals, and is made up of 97% of the UK’s Insolvency Practitioners from all over the UK.
- R3 comments on a variety of personal and corporate insolvency issues. Please contact the press office or see www.r3.org.uk for further information.
- R3 stands for ‘Rescue, Recovery, and Renewal’ and is also known as the Association of Business Recovery Professionals.