Changes to the pre-pack administration process have been pushed back, the Insolvency Service has confirmed, with no changes likely to take place before April.
The minister in charge of insolvency, Ed Davey, had previously said that the amendments would be implemented before the end of this year. The changes are set to include giving creditors three days' notice before a company is sold to a connected party or business.
An Insolvency Service spokesman said that they had attempted to consider all opinions in deciding when to put the changes into force.
"Following discussions with stakeholders, amendments are being made to the Statutory Instrument (SI) by our lawyers," he said. "The SI will not be coming into force by the end of this year and we are now aiming for next year."
It is thought likely that they will be brought in in April, which has historically been the favoured month for insolvency-related updates.
Commenting on the news, Stephen Ideh, from the Business Sale Report, said that the delay was not surprising to many business people, who consider pre-pack administrations as very convenient business tools.
"They claim the procedure often helps limit job loss and maintains customer and supplier confidence, which can often be damaged by liquidation or asset sale," said Ideh. "On the other hand many creditors view pre-packs as an easy escape for directors who have failed to meet their repayments and through the pre-pack deal, are now allowed a new lease of life buying the business back with limited liability and reduced company debt owed."
He added, "The question arises as to whether those ultimately responsible for the company's demise are best suited to run the company going forward. In our opinion creditors deserve more time to have a say in the matter."
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