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A Comparative Analysis of Anglo‐Australian Pre‐packs: Can the Means Be Made to Justify the Ends?
Author(s) -
Wellard Mark,
Walton Peter
Publication year - 2012
Publication title -
international insolvency review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.125
H-Index - 7
eISSN - 1099-1107
pISSN - 1180-0518
DOI - 10.1002/iir.1201
Subject(s) - insolvency , administration (probate law) , balance (ability) , work (physics) , business , business practice , law , law and economics , accounting , economics , political science , finance , business administration , engineering , medicine , mechanical engineering , physical medicine and rehabilitation
Whereas pre‐packaged administrations have been prevalent in the UK for years, Australia's voluntary administration regime has been more restrictive of the practice. This article analyses the evolution of UK pre‐packs, why UK‐style pre‐packs are not prevalent in Australia and the challenges for UK and Australian lawmakers in striking the right balance with pre‐packs in their respective administration regimes. Building upon this analysis, the article proposes a mechanism that might make ‘connected‐party’ pre‐pack business sales work more fairly for stakeholders—that is, by obligating a connected‐party purchaser to make a future‐income contribution in favour of the insolvent company whose business has been ‘rescued’ by a pre‐packaged sale in administration. Copyright © 2012 INSOL International and John Wiley & Sons, Ltd.