Experts in restructuring – Part 1- Pre-pack administrations

The input of independent expert evidence has become increasingly critical to successful restructuring, with spring 2021 seeing yet more changes and now compulsory expert input.  From 30 April 2021 it is now a requirement to obtain a report from an independent evaluator in certain pre-pack administrations.  May 2021 saw several significant court decisions with New Look and Regis concerned CVAs and Virgin Active concerned a restructuring plan.  All three judgments highlighted the need for independent expert input in formulating the restructuring plans.  Obtaining early advice to allow time to obtain proper independent expert input is vital, and this series focusses on some specific areas of restructuring where that is crucial.

Pre-pack administrations

 The Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021 apply to administrations which commence on or after 30 April 2021 (the “Regulations”). The Regulations aim to improve transparency in pre-pack administrations.

The government has taken steps to seek to address concerns about a lack of transparency in pre-pack administrations and lack of confidence in the process in various ways over the last decade in particular, including introducing various “voluntary measures” available to insolvency practitioners from 2015.  Those measures followed on from the Graham Review, an independent review published in 2014 which in turn followed a consultation in 2010 on the same transparency and confidence issues surrounding pre-packs.  There then followed a report in October 2020 as a follow up, to consider the use of these voluntary measures and their impact on the underlying transparency and confidence issues that had been identified more than a decade before.

This report last year noted that there had been an increase in businesses that had been marketed prior to a sale, and that the quality of the marketing had also improved.  However, sales to connected parties in particular appears to have been completed at less than market value, and a significant proportion had actually been sold at more than 25% less than the market value.  There was also a low number of opinions sought from the “Pre-Pack Pool” that had been set up, a group of independent experienced individuals set up by the insolvency industry as part of the Graham Review recommendations to provide non-mandatory independent views on such deals.

The report concluded that an obligatory independent opinion or creditor approval was still required for pre-pack sales.  That has now found its way into legislation in the Regulations which include provisions for mandatory independent scrutiny of connected person pre-pack sales of all or a substantial part of a company’s business or assets, unless creditor approval of the sale has been obtained.


Independent evaluation of restructuring proposals is becoming critical to their approval in a number of areas.  With limitations on creditor diligence and debt recovery actions coming to an end, debtor companies will be under increasing time constraints and pressure when exploring their restructuring options.  Getting good advice at an early stage remains crucial to enable all appropriate and necessary independent input to be sought, and ultimately to identify and then implement a successful restructuring strategy.

Should you have any questions on any of the articles in this series please contact:

Steven Jansch by email: or by phone: 0131 516 5361 / 07841 920 100. 

Eilidh MacEwan by email: or by phone: 0131 285 1809 / 07376 192 463. 

Craig Darling by email: or by phone: 0141 530 2044/07841 920 467

The information and opinions contained in this blog are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.

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