Video: Pre-pack administrations

Mention the words pre-pack to any high street property owner and you may well live to regret it! Despite having been in existence for many years – there's been an explosion in the use of pre-packs in the past 12 months. Some critics are claiming they are now the insolvency practitioner's, or IP's, tool of choice. But why have they come under so much criticism? And is it justified?

On one side we have property landlords and suppliers citing 'legalised robbery'. On the other IP's, and the companies they represent, worship them as a saviour of jobs. But who is right? Retail property has been particularly hard hit in the current recession and several key retailers, including Allied Carpets and Lombok, have been bought out of pre-pack administration. This has had a huge impact on the high street.

Property owners are having a hard time dealing with the pre-pack process and notably with the news that over a third of the administrations do not comply with the Insolvency Service regulations. Driven by this, retail landlords and insurers are pushing for greater clarity from administrators. One of the steps taken to assist property owners is the development of a SIP 16 questionnaire by Lovells and the British Property Federation.

In this programme we inform viewers of what a pre-pack is, consider both the criticisms and benefits, look at the steps taken to date to improve the reputation of pre-packs, as well as considering what future changes might be made. There is also advice on what action should be taken if you come face to face with the pre-pack.

Main contributors: Peter Sargent (President, R3), Daniel Norris (Lovells), Ian Fletcher (Director of Policy (Real Estate), British Property Federation).

This programme

• To see the full version of this programme, go to NBS TV

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