What has changed and when?
SIP 16 has recently been updated. The changes will be effective from 1 November 2013.
What are the changes?
Administrators will now have to provide more detailed information under SIP 16 NO LATER than 7 days (rather than 14) after a pre-pack transaction. They must also file the SIP 16 information with their proposals at Companies House.
What must SIP 16 now include?
The SIP 16 information must include, as well the original information requirements:
- more details regarding the valuation of the business and assets:
- the names and professional qualifications of the valuers/advisers and confirmation they have confirmed their independence
- the valuations obtained of the business or the underlying assets
- a summary of the basis of the valuations obtained and an explanation of the sale of the assets compared to those valuations
- the rationale for the basis of the valuations obtained and an explanation of the sale of the assets compared to those valuations
- if no valuation has been obtained, the reason for not having done so and how the administrator was satisfied as to the value of the assets
- where the business or business assets have been acquired from an IP in the previous 24 months, the administrator should disclose both the details of that transaction and whether the administrator, his firm or associates were involved
- details of registered charges with their dates of creation
- the outcome of any consultations with major creditors
- the outcome of any marketing activities or an explanation of why no marketing was undertaken
- in transactions impacting on one or more related company, the administrator should ensure that the disclosure is sufficient to enable a transparent explanation
- sale consideration disclosed under broad asset valuation categories and split between fixed and floating charge realisations
- disclosure of any deferred consideration
Thankfully – some of the original proposed measures – such as advance notice to creditors of a pre-pack have been abandoned.
SIP 16 now reflects the guidance issued by the Insolvency Service in Dear IP in 2009 and serves as a more comprehensive reminder of an IP’s duties in connection with pre-packs, as well as furnishing creditors with more information on which to base a complaint.