Commenting on the roundtable meeting today, hosted by Norman Lamb MP as part of the ongoing review of ‘pre-pack’ administrations, Richard Fleming, UK Head of Restructuring at KPMG said:
“Ensuring the insolvency profession complies with regulation such as SIP 16 - which details the events leading up to the pre-pack administration and the commercial rationale behind the sale - is a crucial way of buttressing the validity of pre-packs as an essential part of the insolvency practitioner’s tool kit. Since 2008, we have seen numerous examples of pre-packs saving jobs and the viable parts of severely distressed businesses. In January we saw an economic trail of destruction on the High Street, but well-known brands such as Blacks and La Senza have been the beneficiaries of pre-pack procedures: more stores have stayed open and thousands of jobs have been saved.
“It is right and proper that a profession, which is charged with dealing with the worst ramifications of corporate failure, is transparent, consistent and independent. These factors require monitoring and we, as an industry, must ensure procedures such as pre-packs are applied appropriately. However, with the spectre of further fall out in the Eurozone and real home grown economic growth just out of reach, surely we should be focussing our efforts on the health of companies rather than those companies which are already in A&E?
"It is important to hold company directors to account, but we also need to encourage good business. Society must decide on the appropriate balance of regulation on the one hand and encouraging entrepreneurs on the other: chasing miscreant directors versus fostering astute directors. The corporate health campaign, which applies to the vast majority of businesses, should be a positive ‘eat 5 portions of fruit a day’ message. The current message seems to be too focussed on the post mortem of insolvent companies, which we must remember form a small minority of the corporate UK population.”
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For further information please contact:
Sorrelle Cooper, Senior PR manager, KPMG: 020 7694 8527 / 07932 078218
sorrelle.cooper@kpmg.co.uk
Notes to Editors:
A roundtable meeting hosted today by Norman Lamb, Minister for Employment Relations, Consumer and Postal Affairs, as part of the Insolvency Services’ ongoing review of pre-pack administrations was attended by representatives from secured creditors, such as the banks, unsecured creditors, such as the haulage trade body as well as representatives from the insolvency profession and the regulators.
The Insolvency Service’s review of ‘SIP 16 reports - enforcement procedures in pre-pack cases’ was published on Tuesday 15th May 2012:
http://www.bis.gov.uk/insolvency/insolvency-profession/Regulation/statements-of-insolvency-practice/SIP-16-Reports-pre-packs
About KPMG
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
