Pre-Pack Sales to Connected Parties - Evaluator Process

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Under the regulations effective from 30th April 2021, administrators are prohibited from completing a sale of a substantial part of a company’s business or assets to a connected party within the first eight weeks of administration without either:

• Approval from creditors, or

• A written, independent opinion from an evaluator.

These rules apply to both pre-pack and post-pack transactions occurring within the eight-week period following the administrator’s appointment.

Key Requirements

An independent evaluator’s report is now mandatory before any significant disposal of assets or business to a connected party. This includes:

• Directors,

• Shadow directors,

• Officers of the company, or

• Individuals/entities connected to the company.

It is the administrator’s responsibility to determine whether the proposed disposal is “substantial.”

While the connected party is responsible for obtaining the evaluator’s report, the administrator cannot proceed with the sale without it. This report may be obtained prior to the administrator's appointment.

Choosing an Evaluator

• Responsibility lies with the connected party, but the administrator must be satisfied with the evaluator’s suitability.

• The regulations do not require specific qualifications, but the evaluator must:

  • Hold appropriate professional indemnity insurance

  • Possess relevant knowledge, experience, and independence

• The evaluator must be independent of both the connected party and the company, and free from any conflicts of interest.

• Any party who advised the company on restructuring or insolvency within the previous 12 months is not considered independent.

How Proudley Associates Can Support You

We are fully equipped to act as evaluators for a wide range of businesses, assets, and property. Here's why we're the right choice:

• We carry professional indemnity insurance approved by the Royal Institution of Chartered Surveyors (RICS).

• As members of RICS, NAVA Propertymark, NAEA Propertymark, and The Property Ombudsman (TPO), we adhere to strict codes of ethics regarding independence and conflicts of interest.

• Our team brings the necessary knowledge, experience, and objectivity to meet the legal and professional standards required.

• We meet all eligibility criteria and are not subject to any exclusions such as:

  • Corporate or personal insolvency

  • Disqualification orders

  • Capacity restrictions under the Mental Capacity Act 2005

Get in Touch

If you would like to discuss how we can assist, please don’t hesitate to contact us:

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