Role of Insolvency Practitioners in the UK Pre-pack Administrations: Challenges and Control

摘要

The pre-pack administrations ('pre-packs') in the UK have repeatedly been criticised for allowing the exploitation of certain types of unsecured creditors. In this context, the role of the administrators (who are qualified insolvency practitioners) is one of the key elements. This article examines the new challenges brought by the pre-pack strategy to the conventional role of insolvency practitioners as the administrators. It suggests that the pre-determination nature of pre-packs is likely to make the administration proceedings less manager-displacing in practice than the formal rules would suggest. Although this tendency can be expected to facilitate information gathering during the rescue negotiations, it raises urgent questions with respect to the potential alignment of interests between the inside players that may impair the impartiality of the administrators. In response to such challenges, the article argues that, in spite of the recent proposals of introducing drastic statutory regulation to control the controversy of the pre-pack practice, a proportionate way is to see how the existing control mechanisms can contribute more in reinforcing the independence of administrators.