Pre-Pack Review: R3 Has A View - Well, Sort Of

Posted on Oct 20, 2020. by NTI

It’s taken a while for Colin Haig of R3 to come out with a public view about the Government’s proposed changes to the existing rather dormant offerings of the Pre-Pack Pool, and when it eventually came it was very easy to miss. 

When we in the NTI newsroom saw a ‘NEW’ signpost to an article in The Times this afternoon (Monday 19 October) followed by the headline ‘Pre-Packs Don’t Go Far Enough, Experts Warn’, we thought, ay-up what’s that among the pigeons? Turns out it was another pigeon. It even took The Times seven paragraphs to get to the (warning) opinion of our very own Colin, so pallid and predictable are his views. 

Unfair? You’re right; you make your minds up. Here we go, here is the quote from Mr Haig, used in the piece: “... effectively anyone will be allowed to provide an independent opinion on a connected party pre-pack sale, which risks abuse of the system that undermines the entire rationale of these reforms”. Anyone, Colin? Paul Gadd? John Leslie? Careful Mr Haig, you’re on the path that leads up to a road which, if you keep on it for an hour and turn right might lead to a view. Regrettably, his children were unavailable for comment.   

Of course he is right. It is being proposed that a connected party purchasing a company out of Administration can request the view of more than one opinion provider, whereas at the moment they have just the views of non-IPs in the Pre-Pool to seek at their own cost, which has proven as attractive a prospect as brown bread broccoli sandwiches at a kids’ party. 

The reason Practitioners don’t use the existing Pool is because it is at the tepid end of a bad idea, not because we are auditioning for a new season of the Sopranos.

Melanie Leech, chief executive of the British Property Federation, is always game for a view and she added to the gravitas of this excuse for an article by being quoted as saying that the Federation (that’s of British Property, not United ... of Planets, more’s the pity) welcomed the Government mandating independent scrutiny of connected party pre-packs, but said that it was “concerned that the proposed regulations allow multiple opinions to be sought, raising the risk of ‘opinion shopping’ ”.

When was anyone so concerned about multiple opinions? Whatever happened to ‘the more the merrier’ and getting a second and, if necessary third and fourth opinion? “While it’s not unreasonable to get more than one view of a transaction, there should be a low limit to the number of opinions that buyers can get,” she said. Why, Melanie? Why can’t we involve more professional and useful views, if it is thought to be a good idea. We need more people of both weight and opinion in a process that has been attacked for being too secretive, inclusive and tainted with conspiracy.

The Times reports that supporters of pre-packs say that they are an efficient way to rescue struggling businesses, save jobs and maximise returns to creditors, especially in an economic downturn, but critics argue that ... do you know, we can’t even finish the tosh about ‘shedding debt’ and ‘supporting director schemes’. 

If R3 want to do something useful, they should publish statistics about the number of jobs saved by pre-pack Administrations, as contrasted with the numbers lost as a result of these arrangements. Now THAT would be a headline worth following through. 

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