The quick answer
This is an independent body that the buyer of a business in Administration can approach to effectively endorse (or not) the purchase of the business using a pre-pack Administration. It is not a statutory requirement.
In more detail
The pre-pack pool was set up to attempt to address the issue of pre-pack Administrations. This is where creditors find out after the business has failed that it has already been sold. The pre-pack pool is an independent body the directors can go to for an opinion on whether the sale of it as a pre-pack was fair in the circumstances.
The pre-pack pool aims to respond to any request with a decision in two business days. To make contact with the pool go to www.prepackpool.co.uk
Since 2021, new regulations have been introduced that affect Administrators during the disposal of business assets, particularly in pre-pack sales to connected parties. These changes have led to an increased demand for the services of the Pre-Pack Pool.
Under the new rules, if an Administrator plans to sell business assets to a connected party within 8 weeks of entering administration, they must ensure one of the following conditions is met before completing the sale:
Creditor Approval – The Administrator obtains written approval from the company’s creditors for the proposed sale.
Independent Evaluation – The buyer obtains a ‘qualifying report’ from an independent evaluator, assessing whether the sale is reasonable.
The Pre-Pack Pool is one such independent body that can act as the Evaluator. Additionally:
Insolvency Practitioners are required to inform connected parties that the Pool’s services are available to them.
However, using the Pre-Pack Pool is not mandatory—connected parties may choose a different qualified evaluator if they prefer.
