Revised SIP 16 enhances Pre Pack transparency
ICAS has issued a revised compliance standard in relation to pre pack administrations which will enhance transparency to creditors. The new SIP 16 complements the pre pack pool which will start accepting applications on 2 November 2015.
ICAS, together with all recognised professional bodies (RPBs) who authorise insolvency practitioners (IPs), have today issued a revised version of statement of insolvency practice 16 – pre packaged sales in administrations (SIP 16), effective form 1 November 2015.
The SIP has been revised to take into account the recommendations included in Teresa Graham's report into pre pack administrations and is being issued to coincide with the launch of the pre pack pool on 2 November 2015.
The SIP will apply UK wide as there are no jurisdictional differences.
SIP 16 - Pre-Packaged Sales in Administrations
The revised SIP 16 requires enhanced disclosure of information to creditors and the company directors. In advising directors of a company the IP should advise the company that any pre administration marketing should comply with 'marketing essentials' (details of which are given in the SIP) and that any valuations should be carried out by appropriate independent valuers who hold adequate professional indemnity insurance.
An IP is also required to make any connected party considering a pre-packaged purchase aware of the ability to approach the pre pack pool for an opinion on the proposed purchase. Such an approach, together with preparing a viability statement for the purchasing entity, is likely to enhance stakeholder confidence in the pre-packaged sale.
Following the introduction of the revised SIP 16, the Insolvency Service will cease its monitoring activities and the monitoring of SIP 16 will be carried out by the RPBs.
For appointments before 1 November 2015, IPs should still send their SIP 16 disclosures to the Insolvency Service. For all appointments from 1 November 2015 onwards, IPs should send a copy of their disclosure to their own RPB. For joint appointments, only one SIP 16 disclosure needs to be sent to the RPBs. The lead IP should send the statement to their RPB, even if the joint appointees are licensed by different bodies. Joint appointees must ensure that the SIP 16 disclosure has been sent to the lead IPs RPB.
SIP 16 statements being sent to ICAS should be sent to firstname.lastname@example.org