Review will assess the long term impact of pre-pack administrations.
The British Jewellers’ Association (BJA) is set to contribute to a review of pre-pack administrations, following the launch of a campaign again this type of insolvency.
The BJA originally highlighted its concerns with pre-pack administrations in an article posted by Professional Jeweller in November. The campaign follows the increasing number of British businesses using the pre-packaged style of administration to sell off company assets before an administrator is officially appointed.
The BJA raised concerns that pre-packs "are not transparent, that assets maybe sold below market value – especially to a previous owner – with no open market valuation", adding that staff members or others associated with the company end up suffering most.
The BJA has now received replies from the Insolvency Service and MPs confirming a review of the current procedures. This major review is set to address opaque company ownership structures and improve the accountability of company directors.
The BJA chief executive Simon Rainer said: "I am certainly heartened that the government has realised the potential abuses of the current system and warmly welcome the current willingness to listen to the concerns of the BJA and its membership."
The BJA has now been invited to contribute to the reform process and will be meeting with the review head, Teresa Graham, at the end of January to discuss further.
The review will assess the long term impact of pre-pack administrations, whether they encourage growth and employment and whether they provide the best value for creditors as a whole. The report by Teresa Graham is due to be published in the spring of 2014.