Key Point

The Graham Review into pre-pack administrations suggests beefing up SIP16 and creating new steps in the sale process where the sale is to a connected party but stops short of proposing new legislation.

The Graham Review

The review came about as a result of concern that pre-pack administrations were not transparent for stakeholders and in some cases did not result in best value being realized for businesses. Teresa Graham CBE was commissioned by the UK Government to look at the whole process and make recommendations to improve it.

The Recommendations

The recommendations fall into two categories. First is a series of recommendations aimed at strengthening SIP 16 (including a new draft), improving marketing procedures by adherence to six stated principles and ensuring valuations are conducted by properly insured valuers. The second and more controversial category of recommendations concerns pre-pack sales to connected parties such as directors and their associates. Here the recommendations are to involve a pre-pack pool – a panel of experts – to review the deal and opine on it and for the connected party to make a viability statement as to why the new business should avoid the pitfalls of the past.


The first category of recommendations should receive wholehearted support. The second category – also supposed to be implemented on a voluntary basis – is innovative and would be helpful but may prove difficult to implement and police in practice. For example what exactly happens if the best deal (on price) finds no favour with the pre-pack pool?

Graham Review