PARLIAMENTARY WRITTEN QUESTION
Insolvency (2 November 2015)

To ask the Secretary of State for Business, Innovation and Skills, what recent assessment he has made of the effect on (a) businesses affected by pre-pack insolvencies and (b) employees of such businesses of such insolvencies.

Asked by:
Bill Esterson (Labour)

The University of Wolverhampton undertook research as part of Teresa Graham’s June 2014 review into pre-pack administrations. This found that returns to creditors from a pre-pack were slightly lower than from non pre-packed administrations.

The report also found that in about 60% of pre-pack deals all jobs were saved, and in a further 10% some jobs were saved. No data is available on the impact of the insolvency on employment at creditors of the company.

A voluntary package of reforms to pre-packs, as recommended by the Graham review, was launched on 2 November with support from the insolvency industry and creditor groups. The reforms are intended to bring greater transparency and improved creditor confidence in pre-packs, and especially those in which sales are to connected parties.

Answered by:
Anna Soubry (The Independent Group for Change)
5 November 2015