The Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021
Pre-pack Sales to Connected Parties – The New Evaluator Process – We can help!
Under the new regulations, a sale of a substantial part of a company’s property to a connected party cannot be completed by the administrator, within the first eight weeks of the administration, without the approval of creditors or an independent written opinion by an evaluator. The regulations came into force on 30th April 2021 and apply to both pre-packs and post-packs that take place within eight weeks of appointment.
The independent written opinion by an evaluator is required before a substantial disposal of the company’s business or assets to a connected party. A connected party includes directors, shadow directors or other officers of the company or a connected company.
It is the duty of the administrator to determine what quantifies a “substantial disposal” of the company’s business or assets to a connected party. It is the responsibility of the connected party purchaser to obtain the evaluator’s report, however the administrator cannot sell the assets without it.
Selection of the evaluator
Obligation lies with the connected party purchaser, but the administrator must be satisfied that the evaluator is appropriate
The regulations do not state that a particular qualification is required, just that the evaluator has appropriate professional indemnity insurance and has the relevant knowledge, experience and independence
The evaluator must be independent of the connected party and of the company and have no conflict of interest
A party that has advised the company within the 12 months prior with regard to restructuring or insolvency should not be considered independent
How Proudley Associates can help
We can provide evaluator services for a wide variety of businesses, assets and property.
We hold appropriate professional indemnity insurance, approved by the Royal Institution of Chartered Surveyors.
As members of the RICS, the National Association of Valuers and Auctioneers (NAVA Propertymark), the National Association of Estate Agents (NAEA Propertymark) and The Property Ombudsman (TPO), we are bound by a strict code of ethics concerning independence and conflict of interest.
We have the required relevant knowledge, experience and independence.