Question to the Department for Business, Energy and Industrial Strategy:

To ask Her Majesty's Government what assessment they have made of businesses using pre-pack administration processes to buy back subsidiaries at a discounted rate while failing to repay creditors.

The Insolvency Service has carried out an assessment of the impact of voluntary measures introduced in 2015 to improve transparency and confidence in pre-pack sales to connected parties in administration. The findings will be published in due course.

There is some protection in insolvency legislation for unsecured creditors in the form of the “prescribed part”, which is the amount of a company’s assets that must be reserved for the benefit of unsecured creditors when it enters administration.